J 


A  MANUAL 

for 

POST  EXCHANGES 


BY 

FLOYD  D.  CARLOCK 

United  States  Army 


GEORGE  BANTA  PUBLISHING  COMPANY 
MENASHA,  WISCONSIN 


\A 


Copyright  1917 

by 
FLOYD  D.  CARLOCK 


PREFACE 

In  writing  this  manual  the  author  has  presumed  that  his 
readers,  generally,  would  be  men  without  special  training  and 
experience  in  modern  bookkeeping,  accounting,  and  auditing. 
These  subjects  have  therefore  been  presented  in  an  elementary, 
complete,  and  simple  way.  While  written  especially  for  exchange 
officers  and  members  of  exchange  councils,  it  is  believed  that  the 
business  knowledge  to  be  acquired  by  studying  this  manual  will 
be  invaluable  to  officers  and  noncommissioned  officers  engaged  in 
other  kinds  of  army  administrative  and  supply  work. 

The  author  wishes  to  acknowledge  his  indebtedness  and  to 
express  his  appreciations  and  thanks  to  Brigadier  General 
Henry  C.  Hodges,  Jr.,  U.  S.  A.,  who  read  the  manuscripts  and 
made  many  valuable  suggestions,  and  to  Professor  Raymond  W. 
Pence,  De  Pauw  University,  who  assisted  him  in  reading  the 
proofs. 

Post  Exchange,  Fort  McPherson,  Ga.,  F.  D.  C. 

July  1,  1917. 


352430 


TABLE  OF  CONTENTS 

CHAPTER  I 
REGULATIONS  FOR  POST  EXCHANGES 

PAR. 

Laws  of  Congress 1-3 

Army  Regulations: 

Amount  of  Indebtedness  of  Soldiers 4 

Sale   of   Intoxicating  Liquors 5 

Post  Exchange  Fund 6 

Post  Exchange  Council 7 

Proceedings   of   Exchange   Council 8 

Responsibility  for  Expenditures 9 

Loss  of  Exchange  Fund 10 

Disposition  of  Exchange  Fund 12 

Laundry  and  Tailor  Charges 13 

Repair  of  Library  Books 15 

Seeds  for  Post  Gardens        .                            16 

Quartermaster  Material  for  Post  Exchanges        .          .          .          .17 

Stoppages  of  Pay  for  Post  Exchanges 18 

Fuel  for  Post  Exchange  Buildings 19 

Articles  of  Uniform  Clothing  for  Sale 20 

Purchase  of  Subsistence  Stores 21 

Medical  Supplies  for  Civilian  Attendants 22 

Inspection  of  Post  Exchanges 23 

The   Chaplains'    Fund                                                                                 .  24 

General  Orders,  War  Department: 

Purpose 25 

Buildings 26 

Exchange   Officer 27 

Exchange  Steward        .          .          .          .          .          .          .  .28 

Exchange  Council 29 

Sub-Committee  of  Noncommissioned  Officers        ....  30 

Rules  of  Order 31 

First  Expense  of  Stock  and  Fixtures     .         .         .         .         .         .32 

Exchange  Membership 33 

Exchange  Feature 34 

Purchase  and  Sales  of  Goods 35 

Lunch  Room  and  Price  List         .         .         .         .         .         .         .36 

Checks  or  Coupons       .         .         .- 37 

System  of  Keeping  Accounts 38 

1.  Cash   Book 38 

2.  Journal              38 

3.  Ledger 38 

(a)  Post   Exchange 38 

(b)  Merchandise              38 

(c)  Bills  Receivable  (Enlisted  Men)       ....  38 

(d)  Bills  Receivable  (Notes) 38 

(e)  Check  Account 38 

(f)  Personal  Accounts  .          .          .          .          .          .38 

(g)  Expense  Account  .          .          .  •  .          .38 

(h)     Buildings  and  Fixtures 38 

(i)      Profit  and  Loss  Account 

(j)     Dividend  Account             ......  38 

Inventory  Book             .........  38 


FAB. 

Sales  on  Credit     .....  ....       39 

Operating  Expenses      .         . 40 

Distribution  of  Profits .41 

Final  Disposition  of  Business .42 

Reorganization       .         .         .         .         .         .         .         •         •         .43 

Suggestions  as  to  Management: 

Scheme  for  Keeping  Account  of  Stock    .         .         .         .         .44 

Bill    Register          .         .         .         .       . 45 

Invoice  File    . 46 

Scheme  for  Simplifying  Accounts: 

When  Exchange  is  on  a  Cash  Basis         ....       47 

That  are  Practically  Cash  Accounts         .  .       48 

Restaurant      ...  ......       49 


Account  of  Sales    . 
Checks  or  Coupon 
Sales  on  Credit 
Collection  of  Notes 
Cash  Register 
Suggestions  as  to  Auditing 


50 
51 
52 
53 
54 
55 


CHAPTER  II 
BOOKKEEPING 

Double  Entry .  .  .56 

Accounts       ...........       57 

Entries  ..........       58 

The   Ledger 59 

The  Journal  . 60 

The  Cash  Book 61 

The  Purchase  Book .62 

The  Sales  Book 63 

The  Coupon  Issue  Book 64 

Department  Accounts 65 

Cash  Account          .          .          .          .          .          .          .          •          .66 

Post  Exchange  Account 67 

Merchandise    Account  68 

Bills  Receivable  (Enlisted  Men) 69 

Bills  Receivable   (Notes) 70 

Check  Account        .  71 

Accounts  Receivable       ........       72 

Accounts  Payable  ........       73 

Expense  Account  ........       74 

Building  and  Fixtures  Account 75 

Profit  and  Loss  Account 76 

Dividend    Account 77 

Capital  Stock  Account  .  .  .79 

Cash  Account         .         .         .         .         .         .         .         .         .80 

Building  and  Fixtures  Account       ......       81 

Merchandise  on  Hand  Account      .         .         .         .         .         .82 

Purchase   Account  ........       83 

Sales   Account        .........       84 

Coupon  Account     .........       85 

Accounts  Receivable       ........       86 

Accounts    Payable 87 

Bills  Receivable .         .88 

Bills  Payable 89 

Dividends   Account  .  .         .90 


Reserve  Fund  Account 

Reserve  Deposit  Account 

Surplus   Fund   Account 

Sinking  Fund  Account  .... 

Recreation  and  Amusement  Fund  Account 

Benefit  of  Entire  Garrison  Fund  Account 

Insurance   Account          .          . 

Discount  Account    ..... 

Revenue    Account  .... 

Operating  Expense  Account 

Building  and  Fixtures  Expense  Account 

General  Remarks  on  Accounts 

Trial  Balance         ..... 

Trading  Account    ..... 

Profit  and  Loss  Account 

Balance   Sheet 

Balancing  Accounts      ..... 


PAH. 

91 

92 

93 

94 

95 

96 

97 

98 

99 

100 

101 

102 

103 

104 

105 

106 

107 


CHAPTER  III 

MODEL  SET  OF  DOUBLE  ENTRY  ACCOUNTING 

Establishment  of  Post  Exchange 108 

Daily   Transactions 109-120 

The  Accounts 


Proceedings  of  Exchange  Council 


121-191 
192 


CHAPTER  IV 

PRACTICE  SET  OF  DOUBLE  ENTRY  ACCOUNTING 

Coupon  Issue 194 

Credit  Sales 195 

Other  Transactions  196-229 


CHAPTER  V 

SPECIAL  PROBLEMS 
Posting  Double  Entries       .... 

Systematic  Posting  of  Double  Entries    . 

Original  Entries 

Journal  Record  Entries 

Posting  from  the  Purchase   Book 

Posting  from  the  Sales  Book 

Posting  from  the  Cash  Book 

Posting  from  the  Journal     . 
Account  Books 

Invoices  Received  Book 

Invoices  Sent  Book       .... 

The   Cash-Journal          .... 

Cash-Merchandise-Journal      . 

General  Ledger 

Balance  Ledger 

Columnar  Ledger  .... 

Tabular  Ledger    ..... 

Loose  Leaf  Ledger       .... 

Special  Ledger 

Changing  from  Single  to  Double  Entry  Accounting 
Stock  Accounting        .         .         .         .         . 


230 
231 


234 
235 
236 
237 
238 
239 
240 
241 
242 
243 
244 
245 
246 
247 
248 
249 
950 


PAH. 

Storeroom  Stock  Accounting         .          .          .          .          .          .          .251 

Merchandise    Stock    Accounts          ......  252 

Merchandise   Destroyed            .......  253 

Shortages 254 

Sales  Department  Stock  Accounting     ......  255 

Issues  of  Merchandise  to  Sales  Department     ....  256 

Record  of  Sales 257 

Trial   Balances 258 

Detection  of  Errors  in  Trial  Balances  .          .     •     .          .          .          .  259 

Normal  Procedure           ........  259 

Special   Procedure 259 

Special  Aids  to  the  Detection  of  Errors 260 

Financial    Statements 261 

The  Trial  Balance .          .262 

The  Trading  Account 263 

The  Profit  and  Loss  Account 264 

The  Balance  Sheet 265 

Proceedings  of  Exchange  Council 266 

Auditing  Accounts: 

Definition               267 

Systematic  Audit  of  Accounts 268 

Distribution  of  Profits  and  Dividends 269 

Data 269 

Distribution  of  Net  Profits    .                   270 

Distribution  of  Dividends: 

First   Method 271 

Second  Method 272 

Accounting  Disposition  of  Dividends       .....  273 

Depreciations  in  Buildings  and  Fixtures 274 

Buying  and  Selling: 

Buying 275 

Selling 276 

Post  Exchange  Administration 277 

Relief  of  Exchange  Officer 278 

Transfer  of  Post  Exchange  Fund 279 

Information  of  the  Exchange 280 

Company  Exchanges: 

Purpose         ...........  281 

Bookkeeping  and  Accounting 282 

CHAPTER  VI 
DIGEST  OF  OPINIONS  OF  THE  JUDGE  ADVOCATE  GENERAL 

Government  Agencies  and  Instrumentalities  in  General: 

Creation  of            .........  283 

Stoppages  of  Pay  to  Reimburse  Post  Exchange     .         .         .         .284 

Court  Martial  Sentence  of  Forfeiture  of  Pay  to  Satisfy  Indebted- 
ness to  Post  Exchange    .....  285 

Liability  of  Soldier's  Deposits  for  Indebtedness  to  Post  Exchange  286 

Debt  Due  Government  Agency  Collected  at   Pay  Table     .         .  287 
Custodian's  of  Post  Exchange  Responsibility  Greater  Than  That  of 

Gratuitous  Bailee            .....  288 

Responsibility   for  Money   Collected  at   Pay   Table  and   Due   an 
Exchange        


PAR. 

Post  not  under  Command  of  Department      .....  290 
Decision  of  Department  Commander:     No  Appeal         .          .          .291 
Responsibility   for   Money   Collected   at   Pay  Table   and   Due  on 
Government   Agency  May  Sell  Supplies  to   and   Render   Service 

for  the  Government 293 

Post  Exchange  Contracting  with  the  Government        .          .          .  294 
Disposition    of    Funds    of    Government    Agency    where    Agency 

Ceases  to  Exist 295 

Taxation   of   Government   Agency         ......  296 

Internal  Revenue  Tax 297 

Post  Exchanges  in  Particular: 

A.  Characteristics  and  Purposes  of  Post  Exchanges: 

Government  Agency  and  Recognized  by  Acts  of  Congress  298 

Not  a  Corporation,  but  a  Cooperative  Store     .          .          .  298 

B.  Post  Exchange  Officer: 

Allowance  for  Services     .......  300 

Litigation  on  Behalf  of  the  Post  Exchange      .          .          .301 

Employment  of   Counsel 302 

Not  Personally  Responsible  to  Creditors  of  the  Exchange  303 

Responsibility  for  Shortage  in  Funds.      ....  304 

C.  Limitations  as  to  Business: 

Can  Not  Accept  Deposits  from  Enlisted  Men    .         .         .  305 
Can  Not  Collect  Tax  on  Dogs  in  Post     .         .         .         .306 

Competition  with  Commercial  House        ....  307 

D.  Credits  by  Post  Exchange: 

To  Officers 308 

To  Enlisted  Men      .                                                                  .  309 

E.  Liability  for  Debts  of  Post  Exchange: 

Officers  in  General 310 

Of  Exchange  Council  and  Exchange  Officer      .         .         .311 

Shortage  in  Accounts:    Responsibility      ....  312 

F.  Post  Exchange  Buildings: 

Construction  of  Buildings 313 

G.  Appropriations  for  Post  Exchanges: 

How  Expended 314 

H.     Membership  and  Dividends: 

Membership  Continuous  Regardless  of  Personnel     .         .  315 

Appraisement  of  Exchange  on  Change  of  Membership      .  316 

Distribution  of  Dividends 317 

Engineer   Detachment:      Distribution    of    the    Profits    of 

Post  Exchange  after  the  Act  of  August  9,  1912       .  318 
Withdrawal  of  Members:     Appraisal  of  Shares  and  Par- 
ticipation in  Profits 319 

Volunteer  Band  at  Post 320 

I.       Miscellaneous: 

Independent  and  Branch  Exchange  at  the  Same  Post      .  321 

Readjustment  of  Accounts  with  Paymaster      .          .          .  322 

Proceeds  of  Exchange  Council 323 

Regimental  Adjutant  May  Receipt  for  Exchange  Funds 

on  Death  of  Exchange  Officer 324 

Transfer  of  Government  Property  to  Post  Exchanges  at 


PAH. 

Cost  Price 325 

Telegrams  over  Government  Lines 326 

Overpayment  on  Final  Statements 32T 

Fraud  Committed  by  Exchange  Steward  in  the  Manage- 
ment of  an  Exchange  a  Military  Offense    .         .         .  328 

Fuel  and  Light 329 

Leasing    of    Portions    of    Military    Reservations    for    the 

Benefit  of  Post  Exchanges 330 

Retired  Officer:     Assignment  of  to  Active  Duty  as  Ex- 
change Officer 331 

Index                                                                                                      .         •  332 


A    MANUAL  FOR  POST  EXCHANGES 

CHAPTER  I 

REGULATIONS  FOR  POST  EXCHANGES 

1.  The   Post   Exchange   is    not    established   by   law.      Its 
existence,  however,  has  been  recognized  and  sanctioned  by  the 
Congress  in  the  two  following  cases : 

2.  That  hereafter  no  money  appropriated  for  the  support 
of  the  Army  shall  be  expended  for  post  gardens  or  exchanges ; 
but  this  proviso  shall  not  be  construed  to  prohibit  the  use  by 
post  exchanges,  of  public  buildings  or  public  transportation 
when,  in  the  opinion  of  the  Quartermaster  General,  not  required 
for  other  purposes.     Act  of  July  16,  1892  (27  Stat.  178). 

3.  The  sale  or  dealing  in  beer,  wine,  or  any  intoxicating 
liquors  by  any  person  in  any  post  exchange  or  canteen  or  Army 
transport  or  upon  any  premises  used  for  military  purposes  by 
the  United  States  is  hereby  prohibited.     The  Secretary  of  War 
is  hereby  directed  to  carry  the  provisions  of  this  section  into 
full  force  and  effect.     Sec.  38,  Act  of  Feb.  2,  1901  (31  Stat. 
768). 


2  A  MANUAL  FOR  POST  EXCHANGES 

ARMY  REGULATIONS 

4.  Post    exchanges    are    established    and    maintained    under 
special  regulations  issued  by  the  War  Department. 

The  amount  of  indebtedness  of  a  soldier  to  a  post  exchange 
contracted  in  accordance  with  such  regulations  will  be  noted 
on  the  pay  roll  for  the  next  succeeding  month  and  be  deducted, 
if  practicable,  from  his  pay  by  the  quartermaster  making  the 
payment  and  turned  over  to  the  post  exchange  officer,  who  will 
duly  receipt  to  the  quartermaster  and  the  soldier  for  the 
amount  so  received.  In  case  of  discharge  of  a  soldier  the 
amount  of  any  such  indebtedness  will  be  noted  on  the  final 
statement,  and  in  like  manner  deducted  from  payment  made 
thereon.  (Par.  345,  A.  R.,  1913.) 

5.  The  sale  of,  or  dealing  in,  beer,  wine,  or  any  intoxicating 
liquors  by  any  person  in  any  post  exchange  or  canteen  or  Army 
transport,  or  upon  any  premises  used  for  military  purposes 
by  the  United  States,  is  prohibited.     Commanding  officers  will 
carry  the  provisions   of  this   paragraph   into   full   force   and 
effect,  and  will  be  held  strictly  responsible  that  no  exceptions 
or  evasions  are  permitted  within  their  respective  jurisdictions. 
(Par.  346,  A.  R.,  1913.) 

6.  The  Post  Exchange council  of  adminis- 
tration   is    assembled    to    audit    the    exchange 

fund,  to  ascertain  and  examine  the  sources  from  which,  and 
methods  by  which,  they  have  accrued,  and  to  recommend  ex- 
penditures   therefrom.      The    Post    Exchange    Officer     .      .     . 
.     .     is  the  custodian  of  the  Exchange  Fund.     ( Ext.  Par.  316, 
A.  R.,  1913.) 

7 The  Post  Exchange  Council 

will  meet  at  the  end  of  each  month  and  when  necessary.  It 
will  also  meet  at  the  call  of  its  president.  The  Post  Exchange 
Council  will  consist  of  the  officer  in  charge  of  the  exchange  and 
the  commanding  officer  of  each  organization  participating  in 
the  exchange.  It  may  delegate  to  an  executive  committee  of 
its  own  members  the  performance  of  such  portion  of  the  duties 
prescribed  for  the  council  as  the  council  may  decide.  A  formal 

order  convening  the post  exchange  council  is 

.not  necessary.     (Ext.  Par.  317,  A.  R.,  1913.) 


REGULATIONS  FOR  POST  EXCHANGES  3 

8.  The  junior  member  of  the  council  will  record  its  pro- 
ceedings in  an  appropriate  book,  to  include  a  written  certificate 
of  the  responsible  officer  that  the  funds  are  on  deposit  in  a 
reputable  banking  institution  named   in  the   certificate,   or  a 
statement  that  they  have  been  exhibited  to  the-  council,  which 
proceedings  will  be  signed  by  the  president  and  recorder.     The 
post  or  other  commander  will  require  the  proceedings   to  be 
kept   as   this   regulation   prescribes.      Those   of   the   exchange 
council  will  be  submitted  to  the  post  or  other  commander,  who 
will  sign  his  approval  or  objection  in  the  council  book.     Should 
the  post  or  other  commander  disapprove  the  proceedings,  and 
the  council,  after  reconsideration  adhere  to  its  conclusions,  a 
copy  of  the  proceedings  will  be  sent  by  the  commanding  officer 
to  the  department  commander,  whose  decision  thereon  will  be 
final.      The   final   orders   in  each   case  will  be   entered   in   the 
council  book.     (Ext.  Par.  318,  A.  R.,  1913.) 

9.  The  commanding  officer  who   approves  the  appropria- 
tions of  a  council,  will  be  held  responsible  for  all  expenditures 
not  made  in  accordance  with   regulations.      (Ext.   Par.   320, 
A.  R.,  1913.) 

10.  In  case  of  loss  of  the  exchange  fund,  the  circumstances 
will  be  carefully  investigated  and  reported  by  a  board  of  three 
officers,   with   recommendations    as    to    responsibility,    for   the 
decision  of  the  department  commander.     ( Ext.  Par.  321,  A.  R., 
1913.) 

11.  No  projects  by  which  money  will  accrue  will  be  entered 
upon  under  color  of  military  control  without  specific  authority 
from  the  War  Department.     (Par.  323,  A.  R.,  1913.) 

12.  Under  no  circumstances  will  the post 

exchange  funds  be  taken  away  from  the  post  where  the  organi- 
zation to  which  they  pertain  is  stationed,  except  as  may  be 
necessary  to  pay  indebtedness  or  for  deposit  in  a  bank. 

Should  the  officer  who  is  the  custodian  of  these  funds  be 
taken  from  the  post,  on  leave  or  otherwise,  for  any  period 
beyond  three  and  less  than  ten  days,  he  will  leave  the  funds  with 
the  officer  acting  in  his  place.  If  an  officer  is  to  be  absent  for 
more  than  ten  days  he  will  regularly  transfer  the  funds  of 
which  he  is  custodian  to  his  successor. 


4  A  MANUAL  FOR  POST  EXCHANGES 

In  transferring  funds  to  the  successor,  the  accountable 
officer  will  make  the  following  certificate,  including  list  of  out- 
standing debts  and  obligations,  in  the council 

book : 

I  certify  that,  to  the  best  of  my  knowledge  and  belief,  the 
following  is  a  complete  and  accurate  statement  of  all  outstand- 
ing debts  and  obligations  to  date  payable  from  this  fund. 

(C.  A.  R.  No.  6,  May  13,  1914.) 

The  post  exchange funds  re- 
ferred to  in  paragraph  6  (Par.  316,  A.  R.,  1913)  will  if  de- 
posited in  a  bank,  be  placed  under  their  official  designation,  as, 
for  example,  "Post  Exchange  Fund,  Fort  Garrison,"  and  not 
to  the  credit  of  the  officer  who  is  custodian.  (Ext.  Par.  3%4* 
A.  R.,  1913.) 

13.  The  post  exchange  council  will  fix  laundry  charges  and 
prices  charged  by  tradesmen  for  making  and  repairing  uniforms 
of  enlisted  men.     (Par.  319,  A.  R.,  1913.) 

14.  A    soldier    may,    when    necessary,    be    relieved    from 
ordinary  military   duty   to   make,   repair,   or   alter   uniforms. 
The  post  exchange  council  will  fix  the  rates  to  be   charged, 
which  will  not  exceed  the  cost  of  doing  such  work  at  the  clothing 
depot,  and  company  commanders  will  cause  to  be  deducted  from 
the  pay  of  enlisted  men  and  turned  over  to  the  proper  person 
the   amount   properly   due   therefor.      The   provisions   of   this 
paragraph  will  be  construed  to  apply  to  civilian  tailors,  who 
conform  to  prices  fixed  by  post  exchange  council,  as  well  as 
to  enlisted  men  detailed  for  that  duty  by  proper  authority. 
(Par.  279,  A.  R.,  1913.) 

15.  Valuable  books  pertaining  to  a  post  library  which  have 
become  unserviceable  by  fair  wear  and  tear  will,  when  prac- 
ticable, be  repaired,  and  the  cost  of  repair  will  be  a  proper 
charge  against  the  funds  of  the  post  exchange.      (Par.  335, 
A.  R.,  1913.) 

16.  Seeds   for  post  gardens  may  be  procured  from  post 
exchange  funds,  or  from  company  funds.      (Par.  343,  A.  R., 
1913.) 

17.  At  any  post  where  building  material  can  be  obtained 
without  expense  to  the  Government,  and  it  is  desired  to  erect 


REGULATIONS  FOR  POST  EXCHANGES  5 

buildings  by  labor  of  the  troops  for  use  as  post  exchanges, 
gymnasiums,  bowling  alleys,  and  other  places  of  amusement, 
the  post  commander  is  authorized  to  use  the  necessary  teams 
and  such  tools,  window  sashes,  doors,  and  other  material  as  may 
be  on  hand  and  can  be  spared.  (Par.  339,  A.  R.,  1913.) 

18.  Authorized  stoppages  will  be  entered  on  the  pay  rolls 
and  deducted  at  times  of  payment  in  the  following  order: 

(1)  Reimbursements  to  the  United  States. 

(2)  Reimbursements  to  individuals,  as 'the  quartermaster 

of  post  exchange,  for  instance.     .     .      .      .      (Ext. 
Par.  1370,  A.  R.,  1913.) 

19.  A  post  exchange  is  allowed  such  quantity  of  fuel  for 
the  heating  of  the  same  as  may  be  certified  to  as  necessary  by 
the  officers  in  charge  and  approved  by  the  commanding  officer. 
(Ext.  Par.  1044,  A.  R.,  1913.) 

20.  A  post  exchange  may  purchase,  upon  the  certificate  of 
the  officer  in  charge  that  they  are  for  sale  to  enlisted  men  of 
his  post  in  such  quantities  as  are  needed  by  them,  the  following 
articles  of  uniform  clothing: 

Belts,  waist  Laces  (all  kinds) 

Chevrons  (all  kinds)  Leggings,  canvas 

Cords :  Ornaments,  cap  and  collar 

Hat  Stockings 

Tying,  for  service  hats 

Post  commanders  will  regulate  the  purchase  and  resale  of 
such  articles.  Selling  (except  by  the  post  exchange)  or  barter- 
ing these  articles  purchased  or  drawn  from  the  Quartermaster 
Corps  is  forbidden.  (Par.  1174y2,  A.  R.,  1913.) 

21.  A  post   exchange   may   purchase    (subsistence)    stores 
upon  the  certificate  of  the  officer  in  charge,  and  such  purchases, 
when  paid  for  within  the  calendar  month  in  which  made,  are 
regarded  as  cash  sales.     (Ext.  Par.  1241,  A.  R.,  1913.) 

22.  Civilian    employees    at    military    posts,    including    the 
employees   of  post  exchanges,  may  be   furnished  the  medical 
supplies  prescribed  for  them  by  a  medical  officer  under  such 
regulations  as  the  Surgeon  General  may  establish  in  accordance 
with  law.     (Par.  1457,  A.  R.,  1913.) 


6  A  MANUAL  FOR  POST  EXCHANGES 

23.  All  garrisons  and  posts  will  be  inspected  at  least  once  in 
each  fiscal  year  by  the  inspector  of  the  department  or  his 
assistants.     Ungarrisoned  posts  will  be  inspected  at  such  times 
as  the  department  commander  may  direct,  ordinarily  once  in 
two  years. 

Inspections  of  garrisons  and  posts  will  embrace  the  following 

subj  ects  : 

#  #  #  # 

(16)  Management   and   success   of  post   exchange,   and 
whether  properly  supplied  and  conducted  accord- 
ing to  regulations ;  extent,  necessity  for,  and  kinds 
of  gardens,  success  attending,  and  number  of  men 
employed  therein. 

(17)  Management  and  application  of  the 

post  exchange  funds,  and  whether  the  provisions 
of  Article  XXXIII  (Pars.  323,  384,  A.  R.,  1913) 
are  complied  with.     (Ext.  Par.  889,  A.  R.,  1913.) 

AMENDMENTS 

24.  The  chaplain's  fund  will  consist  of  the  gross  amount  of 
money  received  from  all  sources  for  such  fund.     The  chaplain 
will  keep  an  account  of  this  fund  and  also  a  complete  list  of 
all  property  purchased  from  this  fund  or  donated  for  the  use 
of  the  command  or  station.     The  chaplain's  fund  account  will 
be  inspected  by  the  post,  regimental,  battalion,  or  squadron 
commander  at  least  once  each  quarter.     The  chaplain's  fund 
will  pertain  to  that  particular  post  or  organization  for  which 
it  was  originally  intended  and  remain  with  such  post  or  organi- 
zations when  a  chaplain  is  transferred. 

At  a  station  where  there  are  two  or  more  chaplains  on  duty, 
the  commanding  officer  will  designate  the  chaplain  to  account 
for  the  fund  and  property  pertaining  to  the  station  separate 
from  the  fund  and  property  pertaining  to  any  organization  at 
that  station.  (Par.  328y2,  A.  R.  1913.) 


AMENDMENTS 


8  A  MANUAL  FOR  POST  EXCHANGES 


REGULATIONS  FOR  POST  EXCHANGES  9 

POST  EXCHANGE  REGULATIONS 

25.  PURPOSE.      The   Primary  purpose   of  the  post   ex- 
change is  to  supply  the  troops  at  reasonable  prices  with  the 
articles  of  ordinary  use,  wear,  and  consumption,  not  supplied 
by   the   Government,   and   to   afford   them   means   of   rational 
recreation  and  amusement.     Its  secondary  purpose  is,  through 
exchange  profits,  to  provide,  when  necessary,  the  means   for 
improving  the  messes.      The  making  of  large  profits  for  this 
latter  purpose  should  not  be  encouraged.     Undertakings  not 
authorized  by  the  Army  Regulations  or  the  orders  or  instruc- 
tions of  the  War  Department  for  the  purpose  of  accumulating 
company   funds   are  prohibited. 

When  troops  are  absent  from  posts  the  commanding  officer 
thereof,  may,  in  his  discretion,  authorize  the  establishment 
of  camp,  regimental,  battalion,  company,  or  detachment 
exchanges. 

Such  exchanges  will  be  conducted,  as  far  as  practicable, 
in  conformity  to  these  regulations.  (Par.  1.) 

26.  BUILDINGS.     At  every  post  the  post  commander  will 
institute  a  post  exchange.     For  this  purpose,  if  buildings  are 
not  specifically  provided,  he  may  set  apart  any  suitable  public 
building    or     rooms     that     are     available,     or    authorize    the 
renting    of    any    private    building    or    part    thereof    on    the 
reservation    (the   rental   to   be   paid   from   the    funds   of   the 
exchange),  or  when  sufficient  exchange  funds  are  available,  may 
cause  a  suitable  building  to  be  erected  for  the  purpose;  and  if 
a  temporary  building,  or  if  constructed  wholly  or  in  part  by 
the  labor  of  troops,  use  of  the  necessary  teams  and  such  tools, 
window  sash,  doors,  and  other  material  as  can  be  spared  by  the 
Quartermaster's  Department  is  authorized;  but  no  permanent 
structure  will  be  erected  on  a  reservation  without  first  obtaining 
the  authority  of  the  Secretary  of  War.     When  the  exchange 
building   is   the  property   of  the  United   States,   repairs   and 
alterations  will  be  made  as  far  as  practicable  by  the  Quarter- 
master Corps.      When  necessary  and  authorized   repairs  and 
alterations    cannot   be    so   made,   the   expense   thereof  will   be 
borne  by  the  exchange.     (Par.  2.) 


10  A  MANUAL  FOR  POST  EXCHANGES 

27.  THE  EXCHANGE  OFFICER.     The  management  of 
the   affairs   of  the   exchange   will  be  conducted  by   an   officer 
designated  "Exchange  Officer,"   selected  and  detailed  by  the 
commanding  officer.     The  exchange  officer  is  in  charge  of  the 
exchange  and  is  responsible  for  its  management.     He  should 
be  fully  in  sympathy  with  the  purposes  of  the  exchange,  should 
be  a  good  and  close  buyer,  and  possess  the  business  qualifica- 
tions necessary  to  the  success  of  the  exchange.     He  should  take 
every  precaution  to  have  an  honest  steward  and  attendants, 
frequently  checking  their  accounts  in  person.     As  custodian  of 
funds  belonging  to  enlisted  men  he  will  keep  the  cash  book  him- 
self.    At  the  close  of  each  day's  business  he  should  check  up 
the  steward's  daily  report  of  cash  and  coupons  received,  and, 
after  verification,  enter  these  data  in  the  cash  book,  as  well 
as  all  other  transactions  involving  cash  receipts  and  expendi- 
tures, and  deposit  the  cash  on  hand  in  the  safe.     A  file  of  the 
exchange  steward's  daily  report  should  be  kept  to  support  the 
cash  record.    No  employee  should  have  access  to  the  cash  of  the 
exchange  after  it  is  turned  over  to  the  exchange  officer.    He  will 
be  assisted  by  a  steward  and  such  other  attendants  as  the  business 
may  warrant.  In  establishing  a  new  exchange,  and  at  posts  where 
the   business    is    small,    the    steward   and    attendants    may   be 
enlisted  men,  but  where  practicable,  civilians  will  be  employed 
instead  in  all  exchanges  whose  financial  condition  will  justify 
the  expense,  and  in  selecting  them  preference  will  be  given  to 
retired  enlisted  men  and  honorably  dischargd  soldiers.     (Par. 
3.) 

28.  THE     EXCHANGE     STEWARD.       The    exchange 
steward,  who,  if  an  enlisted  man,  should  be  a  noncommissioned 
officer,  should  be  an  accountant,  possessing  a  good  knowledge  of 
bookkeeping  and  commercial  customs,  of  unquestioned  integrity, 
and  of  sufficient  firmness  and  strength  of  character  to  enforce 
order  and  discipline  about  the  premises.     In  the  absence  of  the 
exchange  officer  he  is  in  immediate  control  of  the  business,  and 
must,  therefore,  possess  the  confidence  of  his  superior,  both  as 
to  his  probity  and  capability.     Except  in  cases  where  a  book- 
keeper is  employed,  the  steward  will  keep  the  records  and  books 


REGULATIONS  FOR  POST  EXCHANGES  11 

of  the  exchange  under  the  supervision  of  the  officer  in  charge. 
The  steward  will  submit  a  daily  report  made  from  the  sale  slips 
of  the  cash,  credit,  and  exchange  check  sales,  of  cash  received 
on  credit  accounts,  and  other  amounts  due  the  exchange;  and 
all  disbursements,  supported  by  proper  vouchers,  should  also 
be  listed  on  this  report. 

These  reports,  exhibiting  the  exchange  officer's  approval, 
will  be  placed  on  file  in  a  conspicuous  place  in  one  of  the  ex- 
change rooms.  (Par.  4-) 

29.  THE  EXCHANGE  COUNCIL.  The  council  may  be 
convened  at  any  time  at  the  call  of  its  president  or  by  direction 
of  the  commanding  officer,  and  subject  to  the  approval  of  the 
latter  will  designate  the  articles  to  be  kept  for  sale,  fix  the 
prices  at  which  they  shall  be  sold,  authorize  all  purchases  of 
supplies,  and  fix  the  schedule  of  charges  of  the  barber  shop, 
laundry,  etc.  At  the  end  of  every  month  it  will  meet  to  examine 
the  books  of  the  exchange  and  inspect  the  quality  of  the  articles 
for  sale,  and  see  that  the  exchange  regulations  are  complied 
with. 

Prior  to  the  meeting  of  the  council  the  commanding  officer 
will  designate  one  member  of  the  council,  other  than  exchange 
officer,  to  audit  the  accounts  of  the  exchange. 

The  officer  so  designated  will  certify  in  the  exchange  council 
book  that  he  has  audited  the  accounts  of  the  exchange  and 
that  the  financial  condition  of  the  exchange  as  shown  in  the 
council  book  is  correct.  (For  suggestions  as  to  auditing  see 
pages  38  and  147.) 

At  the  end  of  each  month  it  will  take  a  thorough  inventory 
of  the  stock,  cash,  and  fixtures.  A  statement  of  the  result  of 
the  monthly  investigation  and  of  the  accounts  of  the  exchange 
officer,  showing  the  receipts  and  expenditures  during  the  month, 
the  assets  and  liabilities  and  the  value  or  net  worth  of  the 
exchange  at  the  end  of  the  month;  the  increase  or  decrease 
in  the  value  of  the  exchange  since  last  report ;  the  profit  or 
loss  in  the  different  departments,  etc.,  constituting  this  increase 
or  decrease;  the  percentage  of  gross  profit  will  be  entered  in 
a  book  and  submitted  to  the  commanding  officer  for  his  action, 


12  A  MANUAL  FOR  POST  EXCHANGES 

A  copy  of  the  statement,  with  the  commanding  officer's 
remarks  indorsed  thereon,  will  be  exhibited  in  one  of  the  rooms 
of  the  exchange  during  the  ensuing  month.  Any  question  not 
involving  pecuniary  responsibility  upon  which  the  exchange 
council  and  commanding  officer  may  disagree  will  be  submitted 
for  final  decision  to  the  department  commander. 

The  exchange  council,  with  the  approval  of  the  commanding 
officer,  may  bond  in  a  reasonable  amount  for  the  proper  handling 
of  the  funds  intrusted  to  them,  the  exchange  officer  and  such 
of  the  employees  of  the  exchange  as  deemed  necessary ;  and  may 
authorize  the  employment  of  an  expert  accountant  at  stated 
intervals  to  audit  the  books  of  the  exchange ;  the  expense  of  both 
measures  to  be  borne  by  the  exchange.  (Par.  5.) 

30.  THE      SUB-COMMITTEE     OF     NONCOMMIS- 
SIONED OFFICERS.     A  sub-committee  of  noncommissioned 
officers,  one  from  each  company,  to  be  selected  by  the  captain 
as  best  fitted  to  represent  the  interests   of  the  enlisted  men 
thereof,  will  be  convoked  by  the  commanding  officer  not  less 
than  four  times  a  year.     The  committee  will  orally,  or  in  writ- 
ing, submit  to  the  council  its  views  in  respect  to  the  immediate 
internal  operations    of    the    exchange,     and    recommend    any 
changes  that  may  be  desired  by  the  enlisted  men,  but  it  is  not 
empowered  to  criticize  the  management.     Its  views  and  recom- 
mendations will  be   carefully   and   respectfully   considered  by 
the  council,  whose  action  thereon  will  be  reviewed  by  the  com- 
manding officer.     (Par  6.) 

31.  RULES   OF   ORDER.      Rules   of   order   will  be   pre- 
scribed by  the  officer  in  charge,  under  the  commanding  officer. 
Gambling  or  playing  any  game  for  money,  or  anything  of  value, 
is   forbidden   in    any    exchange.      Civilians,    other    than    those 
employed  and  resident  on  the  military  reservation,  will  not  be 
permitted  to  enter  rooms  of  an  exchange  without  first  obtaining 
the  authority  of  the  exchange  officer.     (Par.  7.) 

32.  FIRST  EXPENSE  OF  STOCK  AND  FIXTURES. 

The  expense  of  fitting  up  the  quarters  of  the  exchange  and  pro- 
curing the  necessary  articles  for  the  first  stock  and  fixtures 


REGULATIONS  FOR  POST  EXCHANGES  13 

may  be  met  by  an  assessment  upon  the  funds  of  the  several 
organizations  contributing  to  the  institution,  or  these  may  be 
contracted  for,  or  procured  on  credit.  When  procured  on 
credit,  the  bills  must  be  paid  from  the  first  profits,  and  it  is  to 
be  distinctly  understood  that  the  officers  incurring  the  debt  are 
responsible  for  the  payment,  and  not  the  Government.  The 
Quartermaster  Corps  is  authorized  to  sell  for  cash  to  exchanges 
at  cost,  with  price  of  transportation  added,  such  articles 
of  forage,  furniture,  and  fixtures  as  may  be  needed  and  can  be 
spared  from  stock  on  hand.  (Par.  8.) 

33.  EXCHANGE  MEMBERSHIP.  Members  of  the 
exchange  must  be  organizations,  companies,  or  detachments. 
By  "detachments"  is  meant  an  organization  consisting  of  a 
number  of  enlisted  men  not  belonging  or  attached  to  a  company, 
such  as  the  Quartermaster  Corps,  Medical  Department,  Signal 
Corps,  or  Band. 

Individual  enlisted  men,  such  as  post  or  regimental  non- 
commissioned officer,  or  individual  members  of  the  Medical 
Department,  Signal  Corps,  or  Quartermaster  Corps,  cannot 
become  members  of  the  exchange  unless  three  or  more  of  them 
are  associated  in  a  mess. 

When  an  exchange  is  first  established  the  exchange  council 
will  fix  the  amount  necessary  to  its  establishment.  When  this 
amount  has  been  determined  it  will  be  divided  into  a  number  of 
shares  equal  to  the  maximum  authorized  enlisted  strength  of 
all  organizations,  companies,  and  detachments  desiring  to  be- 
come members.  The  amount  to  be  paid  by  each  organization, 
company,  and  detachment  shall  be  determined  by  multiplying 
the  value  of  one  share  by  its  authorized  maximum  enlisted 
strength.  Whenever  a  company  or  detachment  applies  for 
membership  in  an  exchange  already  organized,  a  careful  esti- 
mate of  the  market  value  of  the  property  will  be  made  by  a  dis- 
interested officer — preferably  a  field  officer — who,  whenever 
practicable,  will  be  assisted  in  the  performance  of  the  duty  by 
a  representative  of  each  party  in  interest;  these  appraisers 
will  be  designated  by  the  post  commander.  The  estimate  must 
be  approved  by  the  commanding  officer,  or  submitted  on  appeal 


14  A  MANUAL  FOR  POST  EXCHANGES 

to  the  department  commander,  whose  decision  will  be  finaL 
The  amount  to  be  paid  by  the  incoming  organization  shall  be 
determined  by  dividing  the  amount  of  appraisal  by  the  number 
of  shares  already  owned  in  the  exchange  and  multiplying  this 
result  by  the  authorized  maximum  enlisted  strength  of  the 
incoming  organization.  The  sum  thus  paid  into  the  funds  of 
the  exchange  should  be  regarded  the  same  as  funds  resulting 
from  any  other  sale,  and  go  to  increase  its  cash  account  or 
working  capital.  It  should  not  be  divided  among  the  members 
excepting  as  it  may  become  divisible  as  a  subsequent  declaration 
of  dividends.  A  company  joining  the  exchange  when  unable  to 
pay  its  assessment  in  cash  may  be  charged  with  it,  and  such 
charge  may  be  liquidated  from  the  company's  share  of  the 
profits  of  the  exchange.  An  organization  joining  should  pass 
to  the  exchange  some  written  evidence  of  its  debt  and  obligation 
to  pay  the  amount  assessed,  and  such  paper  should  be  carried 
on  the  books  of  the  exchange  as  a  "bill  receivable"  and  be 
regarded  as  an  asset,  which  should  be  reduced  in  value  from 
time  to  time  as  the  profits  are  divided.  When  an  organization, 
by  reason  of  change  of  station  or  for  other  cause,  desires  to 
withdraw  from  an  exchange  the  value  of  its  share  being  de- 
termined, that  sum  will  be  withdrawn  from  the  gross  funds  of 
the  exchange  and  paid  over  to  the  withdrawing  organization. 
Credit  checks  for  all  debts  due  the  exchange  from  enlisted  men 
of  the  organization,  will  be  turned  over  as  so  much  cash  to  the 
withdrawing  organization,  and  such  checks  pertaining  to  men 
still  belonging  to  the  organization  may  be  used  in  part  payment 
of  entrance  assessment  into  another  exchange,  in  which  case 
they  will  become  debts  due  the  new  exchange  and  will  be  col- 
lected or  disposed  of  as  prescribed  in  paragraph  39. 

Any  amount  due,  but,  for  lack  of  available  funds,  not  paid 
to  a  company  when  retiring  from  the  exchange,  should  be  paid 
out  of  the  first  profits  accruing  to  the  institution;  the  amount 
so  due  and  unpaid  should  be  carried  on  the  books  of  the  ex- 
change as  a  "bill  payable"  and  be  regarded  as  a  liability  until 
liquidated.  (Par.  9.) 


REGULATIONS  FOR  POST  EXCHANGES  15 

[Membership  in  the  post  exchange  is  not  obligatory  on  the 
units  which  go  to  form  a  garrison.  (Decision  of  Acting  Secre- 
tary of  War,  April  00,  1908—1366931  A.  G.  0.)~\ 

34.  EXCHANGE  FEATURES.  An  exchange  doing  its 
full  work  should  embrace  the  following  sections:  (a)  A  well- 
stocked  general  store  in  which  such  goods  are  kept  as  are 
usually  required  at  military  posts,  including  tickets  to  approved 
entertainments;  (b)  A  well-kept  restaurant  supplied  with  as 
great  a  variety  of  viands  as  circumstances  permit,  such  as  tea, 
coffee,  cocoa,  non-alcholic  drinks,  soup,  fish,  cooked  and 
canned  meats,  sandwiches,  pastries,  etc.;  (c)  Reading  and 
recreation  rooms,  supplied  with  books,  periodicals,  and  other 
reading  matter,  billiard  and  pool  tables,  bowling  alley,  and 
facilities  for  other  proper  indoor  games;  (d)  A  well-equipped 
gymnasium,  possessing  also  the  requisite  paraphernalia  for  out- 
door athletics,  sports  and  games,  such  as  baseball,  football, 
tennis,  cricket,  polo,  golf,  etc. ;  (e)  Barber  shop,  laundry,  tailor 
shop,  and  shoe-repair  shop. 

No  other  features  than  those  enumerated  will  be  added  to  the 
business  of  an  exchange  without  the  authority  of  the  War 
Department.  Keeping  an  open  account  with  individuals  against 
which  checks  may  be  drawn  is  not  a  proper  feature  of  the 
exchange  and  is  forbidden. 

Post  exchanges  may,  however,  as  an  accommodation  to  dis- 
charged soldiers,  cash  their  final  statements.  No  charge  will 
be  made  for  the  accommodation,  but  a  small  part  of  the  value 
of  the  final  statements  may  be  retained  until  the  account  is 
paid  by  the  paymaster,  to  insure  against  loss  due  to  error  in 
calculating  interest,  travel  pay,  etc. 

The  amount  retained,  less  cost  of  exchange  or  postoffice 
order,  will  be  transmitted  to  the  soldier  as  soon  as  the  actual 
state  of  account  is  known. 

The  exchange  assumes  no  liability  for  errors  for  overpay- 
ments to  soldiers  made  by  quartermasters,  the  liability  resting 
on  the  company  commander  who  signs  the  accounts  or  the 
quartermaster  who  pays  them,  according  to  the  source  of  the 
error. 


16  A  MANUAL  FOB  POST  EXCHANGES 

While  it  is  not  required  that  exchanges  shall  cash  final  state- 
ments of  discharged  soldiers,  it  should  be  done  if  practicable 
whenever  final  statements  cannot  be  cashed  otherwise  without 
delay  or  expense  to  the  soldier. 

The  practice  of  obtaining  occasional  services  from  post  ex- 
changes, post  laundries,  and  other  quasi  public  agencies  that 
are  established  and  maintained  at  military  posts  by  the 
authority  of  the  War  Department,  will  hereafter  be  authorized 
only  in  cases  in  which  services  of  the  same  class  cannot  be  as 
conveniently  or  reasonably  obtained  elsewhere  and  where  a 
direct  advantage  will  accrue  to  the  Government  from  the  method 
resorted  to.  In  no  case  will  a  post  exchange  or  post  laundry 
be  permitted  to  enter  into  public  competition  or  to  submit  bids 
in  response  to  advertisements  calling  for  proposals  for  furnish- 
ing supplies  or  services.  When  accounts  are  submitted  for  pur- 
chases of  the  kind  described  above,  the  vouchers  will  contain 
a  full  statement  of  the  grounds  upon  which  the  purchase  of 
supplies  or  the  procurement  of  services  was  based  and  will 
fully  set  forth  all  the  circumstances  of  the  transaction,  with  a 
view  to  enabling  the  proper  bureau  of  the  War  Department  and 
the  accounting  officers  of  the  Treasury  Department  to  de- 
termine whether  the  purchase  was  in  the  public  interest.  Public 
funds  received  for  such  services  will  be  taken  up  in  the  accounts 
of  the  post  exchange  or  post  laundry,  and  will  be  accounted 
for  in  the  manner  prescribed  for  such  accounting  in  the  Army 
Regulations.  (Par.  10.) 

35.  PURCHASE  AND  SALE  OF  GOODS.  Purchases 
will  be  made  by  the  exchange  officer,  but  articles  in  considerable 
quantities  will  be  procured  under  contract  by  the  exchange 
officer,  with  the  approval  of  the  council.  In  no  case  will 
orders  for  goods,  however  small,  be  given  by  the  enlisted 
attendants  to  the  person  furnishing  them,  nor  shall  the  steward 
or  any  employee  of  the  exchange  have,  either  directly  or  in- 
directly, any  personal  interest  in  the  purchases,  sales,  profits, 
or  any  advantage  of  wastage  or  perquisites  of  any  kind  what- 
ever. Whenever  contracts  or  agreements  for  purchases  are 
made  by  exchange  authorities,  who  by  change  of  station  or 


REGULATIONS  FOR  POST  EXCHANGES  17 

other  cause  are  removed,  such  contracts  or  agreements  must 
be  carried  out  by  their  successors.  The  Quartermaster  Corps 
is  authorized  to  sell  to  the  exchange  at  cost  price  any  of 
the  articles  composing  the  ration  and  such  other  articles  as 
may  be  on  hand  for  sale.  But  in  reselling  such  goods  in  small 
quantities,  except  meat,  no  profit  will  be  charged  by  the  ex- 
change beyond  the  fractions  of  cents  that  are  necessary  in 
making  change. 

All  goods  purchased  on  account  of  the  exchange  should  be 
delivered  to  it  and  properly  accounted  for  on  its  books. 

36.  LUNCHROOM  AND  PRICE  LISTS.     In  the  lunch- 
room prices  should  be  made  as  low  as  the  cost  of  the  articles, 
increased  by  expenses   of  attendants   and  waste,  will  permit. 
Other  than  this  the  tariff  of  prices  will  be  regulated  by  the 
circumstances  surrounding  each  exchange.     Printed  or  written 
price  lists  will  be  conspicuously  posted  in  the  various  sections, 
and  will  be  corrected  when  necessary.     (Par.  12.) 

37.  CHECKS    OR    COUPONS.     The    use    of    checks    or 
coupons  representing  values,  and  exchangeable  for  merchandise 
or  other  charges  at  the  exchange,  is  encouraged  merely;  but 
care  should  be  taken  that  these  checks  are  not  disposed  of  to 
unauthorized  persons,  and  to  provide  against  this,  they  should 
never  be  redeemed  in  cash.     When  permitted  by  the  command- 
ing officer,  they  should  be  sold  by  the  exchange   officer  and 
regarded  as  a  liability  until  redeemed. 

The  coupon-book  system  of  extending  credit  to  enlisted  men 
will  be  used  by  all  exchanges  conducted  at  posts  where  more 
than  two  organizations  are  stationed,  except  at  temporary 
stations  and  at  places  where  conditions  of  service  have  made 
it  impracticable  to  procure  the  coupon  books. 

These  coupon  books  will  bear  the  name  of  the  enlisted  men  to 
whom  issued  and  will  be  honored  at  the  exchange  only  when 
presented  by  the  enlisted  man  whose  name  appears  on  book. 

Checks  or  coupons,  are,  under  certain  circumstances,  as 
valuable  as  cash.  The  exchange  officer  on  taking  charge  of  an 
exchange  should  verify  the  amount  of  checks  or  coupons  turned 


18  A  MANUAL  FOR  POST  EXCHANGES 

over  to  him,  and  thereafter  should  carefully  keep  an  account 
of  receipts  and  issues.     (Par.  13.) 

38.  SYSTEM  OF  KEEPING  ACCOUNTS.  A  double 
entry  system  of  bookkeeping  will  be  used.  The  exchange 
officer  will  keep  the  accounts  of  the  exchange  so  that  the 
status  of  the  exchange  can  be  readily  understood  at  any 
time,  and  so  as  to  afford  the  information  necessary  to  render 
the  reports  herein  prescribed.  All  business  of  the  exchange 
must  be  transacted  in  its  name,  and  not  in  that  of  the  exchange 
officer.  All  invoices,  receipted  bills,  and  other  books  and  papers 
relating  to  the  business  of  an  exchange,  except  the  exchange 
council  book,  and  pertaining  to  accounts  that  have  been  closed 
for  more  than  six  years,  may  be  destroyed  as  no  longer  re- 
quired for  the  protection  of  the  exchange,  except  in  the  case  of 
location  of  an  exchange  where  the  statute  of  limitations  pre- 
scribes a  longer  period  on  such  accounts  in  which  case  the  papers 
will  be  kept  for  such  longer  period.  The  papers  specified  will 
be  destroyed  under  the  direction  of  the  commanding  officer  by 
the  exchange  officer,  who  will  record  the  action  in  the  exchange 
council  book,  which  will  be  continued  as  a  permanent  record. 
In  the  event  of  the  abandonment  of  a  post,  the  exchange  council 
book,  together  will  all  other  records  not  destroyed  as  above 
provided,  will  be  forwarded  to  the  Adjutant  of  the  Army.  The 
following  books  will  be  kept  in  all  post  exchanges. 

1.  CASHBOOK.  In  this  book  will  be  entered  in  separate 
columns,  appropriately  headed  according  to  the  classification 
into  which  it  is  desired  to  divide  the  receipts  and  expenditures, 
each  day's  transaction. 

0.  THE  JOURNAL.  This  book  is  used  to  prepare  trans- 
actions for  posting  to  the  ledger.  It  will  show  by  debit  and 
credit  entries  such  original  entries  affecting  the  business  of  the 
exchange  as  are  not  posted  from  the  cash  book  or  other  books 
of  original  entry. 

3.  THE  LEDGER.  In  this  record  will  be  entered  under 
separate  accounts  all  debit  and  credit  transactions  affecting 
the  business  of  the  exchange,  so  as  to  show  the  amounts  due  to 
or  from  the  exchange  on  each  account.  Accounts  will  be  kept 
under  the  following  heads : 


REGULATIONS  FOR  POST  EXCHANGES  19 

(a)  Post  Exchange.     To  show  the  value  of  the  exchange. 

(b)  Merchandise.     To  show  on  the  debtor  side  the   cost 
of  merchandise  purchased  and  on  the  credit  side  the  amount 
received   for   merchandise    sold.      In   opening   this   account   it 
should  be  charged  with  the  value  of  the  inventory  then  on  hand. 
When  the  account  is  to  be  closed  it  will  be  credited  with  the 
value  of  the  inventory  then  on  hand,  and  the  difference  between 
the  two  sides  will  be  the  profit  or  loss.* 

(c)  Bills  Receivable  (Enlisted  Men).     To  show  the  value 
of  checks  issued  to  enlisted  men,  and  the  amount  of  each  received 
from  them  in  payment  of  their  due  bills.     When  checks  are 
issued  the  entry  will  be  "Bills  Receivable,  Dr.  to  Checks" ;  and 
when  the  due  bills  are  paid  by  the  enlisted  men  the  entry  will  be, 
"Cash,  Dr.  to  Bills  Receivable."    The  difference  between  the  two 
sides  of  the  account  will  show  the  amount  of  due  bills  on  hand 
unpaid. 

(d)  Bills  Receivable   (Notes).     To   show   the   amount   of 
notes   given  by   organizations   in   part   payment   of  purchase 
money  or  for  other  purposes;  also  the  amount  of  payments 
thereon  and  credits  from  dividends. 

(e)  Check  Account.     To  show  the  amount  of  checks  out- 
standing.     When  the   checks   are  issued  this   account  will  be 
credited  as  above,  thus,  "Bills  Receivable,  Dr.  to  Checks."    The 
amount  of  checks  received  each  day  for  merchandise  will  be 
charged  to  the  account,  thus,  "Checks,  Dr.  to  Merchandise." 
The  difference  between  the  two  sides  will  show  the  amount  of 
checks  outstanding. 

(f)  Personal   Accounts.     An    account   with   each   person, 
firm,  or  organization  having  any  credit  transactions  with  the 
exchange,  to  show  the  amount  due  to  or  from  each  by  the 
exchange.     When  the  business  of  the  exchange  will  warrant, 
instead  of  keeping  the  accounts  of  officers  and  others  whose 
purchase  on  monthly  credit  in  the  general  ledger,  such  accounts 
may  be  kept  in  a  "Petty  Ledger"  and  posted  monthly  to  the 
general  ledger  under  the  title  "Petty  Ledger  Accounts." 

(g)  Expense  Account.     To  show  the  cost  of  all  expenses 
attendant  upon  the  business  of  the  exchange. 

*The  profit  or  loss  so  obtained  will  be  the  gross  profit  or  loss. — The  Author. 


20  A  MANUAL  FOR  POST  EXCHANGES 

(h)  Building  and  Fixtures.  To  show  all  amounts  expended 
for  the  betterment  of  the  exchange  property,  and  the  deprecia- 
tion of  value  of  all  fixtures. 

Supporting  this  account  should  be  kept  a  list  of  all  fixtures 
showing  date  of  purchase,  quantity,  original  cost,  and  deprecia- 
tion as  determined  from  time  to  time.  The  total  money  value 
of  the  fixtures  as  shown  in  the  list  must  always  agree  with  the 
ledger  account  of  the  same. 

(i)  Profit  and  Loss  Account.  Into  it  are  closed  all  accounts 
showing  a  profit  and  loss.  It  is  debited  for  losses  and  credited 
for  profits  or  gains.  The  difference  between  the  two  sides  will 
show  the  net  profit  or  loss  and  will  be  transferred  to  the  post 
exchange  account. 

(j)  Dividend  Account.  To  show  amount  of  dividends 
declared  by  the  exchange  council.  When  a  dividend  is  declared 
the  post  exchange  account  is  debited  with  the  amount  of  the 
dividend  declared  and  the  dividend  account  credited.  When 
the  dividend  is  paid  the  dividend  account  is  debited  and  cash 
credited. 

4.  AN  INVENTORY  BOOK.     In  this  book  will  be  entered 
a  copy  of  all  inventories  taken  by  the  exchange  council,  and  of 
the  inventory  taken  when  the  exchange  officer  is  relieved.    Each 
inventory  will  show  the  number  of  each  article  held  for  sale  and 
its   cost   or   appraised  value;   also   of  all   exchange  property 
available  as  an  asset,  such  as  buildings,  fixtures,  etc. 

5.  Stock  Record.      This  record  will  show  all  merchandise  on 
hand  at  the  beginning  of  each  month  received,  sold,  and  expended 
during  the  month  and  the  balance  on  hand  at  its  close. 

Such  other  books  and  records  as  are  deemed  necessary  to 
show  stock  on  hand  and  value  of  exchange  will  be  kept  in  post 
exchanges  by  the  exchange  officer  or  under  his  personal  super- 
vision. (Par.  H.) 

39.  SALES  ON  CREDIT.  When  the  commanding  officer 
and  council  are  agreed  that  it  is  to  the  true  interest  of  the 
command,  the  former  may  authorize  a  credit  at  the  exchange 
to  any  soldier  in  good  standing  to  an  amount  not  exceeding 
in  any  one  month  one-third  of  his  monthly  pay.  This  will  be 


REGULATIONS  FOR  POST  EXCHANGES  21 

given  upon  the  request  of  the  soldier,  in  writing,  approved  by 
his  company  commander,  and  these  credit  checks  will  be  carried 
on  the  accounts  of  the  exchanges  as  "bills  receivable"  until 
paid.  Soldiers  granted  credit  will  be  distinctly  informed  that 
they  must  make  prompt  and  unsolicited  payment  to  the  ex- 
change officer  on  the  next  pay  day.  Defaulters  will  be  debarred 
the  privileges  of  the  exchange  and  are  liable  to  trial  and 
punishment.  It  is  the  duty  of  the  soldier  who  has  been  given 
credit  to  pay  the  amount  as  soon  as  he  receives  his  pay,  and 
the  exchange  officer  will  be  present  at  the  place  of  payment  to 
receive  the  money  or  make  such  arrangements  as  will  facilitate 
the  payment.  Credit  will  not  ordinarily  be  extended  to  a 
soldier  between  date  of  last  payment  on  rolls  before  discharge 
and  the  date  of  discharge.  When  the  debt  has  remained  unpaid 
one  pay  day  on  which  the  soldier  was  paid  a  balance 
sufficient  to  discharge  such  debt  and  no  other  means  of  collec- 
tion is  practicable,  the  exchange  officer  will  notify  the  company 
or  detachment  commander,  who  will  note  the  amount  on  the  next 
pay  rolls  as  "Due  Post  Exchange  -  — ,"  and  on 

succeeding  rolls  until  the  debt  has  been  collected  or  until  it  is 
apparent  that  it  cannot  be  collected,  when  the  credit  check  will 
be  turned  over  to  the  company  or  detachment  in  lieu  of  so  much 
cash  at  the  next  distribution  of  profits  as  provided  in  para- 
graph 40  (17). 

Department  and  division  commanders  are  authorized  to  per- 
mit company  commanders  to  extend  credit,  to  an  amount  not 
exceeding  one-half  of  his  monthly  pay,  to  any  soldier  in  good 
standing,  at  a  company  exchange  which  has  been  authorized  by 
the  department  or  division  commander  or  higher  authority. 

In  the  case  of  sales  to  officers  and  others  on  monthly  credit 
account  remaining  unpaid  on  the  15th  of  the  month  following 
that  for  which  account  is  rendered  will  be  reported  by  the 
exchange  officer  to  the  commanding  officer  with  a  view  to  having 
the  account  settled.  (Par.  15.) 

40.  OPERATING  EXPENSES.  To  secure  uniformity 
in  rendering  accounts  and  accuracy  in  preparing  comparative 


22  A  MANUAL  FOR  POST  EXCHANGES 

statements,    the    following    are    specified    as    the    items    that 
properly  enter  into  the  account  of  operating  expenses: 

(a)  Compensation  of  attendants. 

(b)  Unavoidable  breakage,  wastage,  destruction,  and  dam- 
age.* 

(c)  Insurance    on    merchandise,    furniture,    fixtures,    and 
building,  if  the  property  of  the  exchange. 

(d)  The  cost  of  books,  blanks,  and  other  stationery;  neces- 
sary policing  about  the  quarters,  when  not  performed  by  the 
regular  attendants;   express   and   freight  charges   on  articles 
that  are  neither  merchandise  nor  permanent  fixtures. 

Transportation  should  not  be  charged  to  operating  expenses, 
but  added  to  the  cost  of  the  merchandise  or  fixtures  to  which 
it  pertains.  Repairs  to  quarters  and  repairs  to  and  renewal 
of  fixtures  should  be  charged  to  buildings  and  fixtures,!  an(* 
not  to  operating  expenses.  (Par.  16.) 

41.  DISTRIBUTION  OF  PROFITS.  When  an  exchange 
is  absolutely  free  from  debt  a  sum  sufficient  to  cover  all  antici- 
pated debts  for  at  least  one  month,  will,  at  the  end  of  each 
quarter,  or  oftener  if  deemed  advisable  by  the  council  and  com- 
manding officer,  be  taken  from  the  cash  on  hand  and  set  aside  as 
a  reserve  fund,  and  the  remainder,  which  will  represent  the  net 
profits  of  the  exchange  for  the  period  specified,  will  be  disposed 
of  in  the  following  manner : 

(a)  Five  per  centum  will  be  set  aside  as  a  fund  which  will 
be  divided  among  the  members  of  the  exchange  proportionately 
to  the  strength  of  the  enlisted  membership.  This  amount  may 
be  increased  by  the  council  with  the  approval  of  the  command- 
ing officer,  but  will  in  no  case  exceed  10  per  centum.  It  will  be 
distributed  as  follows: 

*  These  items,  in  modern  business  practice,  are  seldom  charged  to  Expense,  for 
if  they  are  the  Merchandise  Account  must  be  credited  with  them,  which  misrepresents 
the  gross  profit.  These  items,  however,  must  be  entered  on  the  stock  records. — The 
Author. 

tThe  costs  of  repairs,  alterations,  and  upkeep  of  buildings  and  fixtures;  such  as, 
broken  doors  and  windows  and  fixtures,  the  painting  of  buildings,  etc.,  etc.,  do  not 
represent  an  increased  valuation,  but  only  repair  and  prevent  depreciations  in  value. 
To  charge  such  costs  to  buildings  and  fixtures  causes  them  to  be  represented  as 
fixed  assets ;  they  should  be  charged  to  a  buildings  and  fixtures  expense  account 
which  is  undoubtedly  intended  in  the  above  paragraph.  Additions  to  buildings  and 
additional  fixtures  are  charged  to  buildings  and  fixtures  and  carried  as  fixed  assets. 
—The  Author. 


REGULATIONS  FOR  POST  EXCHANGES  23 

(1)  Where   the   members   belong   to   regiments,   the   share 
of  such  members  will  be  paid  into  their  regimental  fund  wherever 
the  headquarters  of  the  regiment  may  be  stationed. 

(2)  Where   the   members   belong   to    Corps    of   Engineers, 
it  will  be  paid  to  the  engineer  band. 

(3)  When  the  members  are  units  of  the  Coast  Artillery 
Corps  stationed  at  a  fort  at  which  a  Coast  Artillery  Corps  band 
is  serving,  the  share  will  be  paid  to  the  band.     When  the  mem- 
bers are  units  of  the  Coast  Artillery  Corps  stationed  at  a  fort 
in  a  coast  defense  command  other  than  the  fort  at  which  a 
Coast  Artillery  Corps  band  is  serving,  an  equitable  per  cent, 
to  be  determined  by  the  coast  defense  commander  and  based 
upon  the  services  of  the  band  at  that  fort,  will  be  paid  to  the 
band.     When  the  members  are  units  of  the  Coast  Artillery 
Corps  stationed  in  a  defense  command  in  which  no  Coast  Artil- 
lery Corps  band  is  stationed,  the  shares  will  be  paid  to  such 
members. 

(4)  Where    the    members    belong    to    organization    having 
no  band,  it  will  be  paid  to  the  band  serving  at  the  post,  if  there 
be  one;   otherwise  to  such  members. 

(5)  When    troops    holding    membership    in    the    exchange 
are  temporarily  absent  the  5  per  centum,  or  the  amount  set 
aside,  will  be  divided  among  the  members  of  the  exchange  pro- 
portionately to  their  dividends  and  distributed  as  provided  for 
above. 

(b)  Such  sum  as  the  council  shall  recommend  and  the 
commanding  officer  shall  approve,  will  be  set  aside  for  the  bene- 
fit of  the  entire  garrison,  to  be  disbursed  by  the  post  exchange 
officer  on  written  recommendation  of  the  chaplain,  approved 
by  the  post  or  regimental  commander  for  the  recreation  and 
amusement  of  the  enlisted  men  of  the  command.  Any  property 
purchased  with  funds  so  derived  shall  pertain  to  such  exchange 
as  part  of  its  fixtures.  At  posts  other  than  chaplain  posts 
this  fund  for  the  recreation  and  amusement  of  the  enlisted  men 
will  be  disbursed  by  the  exchange  officer  on  the  requisition  of 
any  officer  detailed  in  charge  of  such  recreation  and  amusement 
and  approved  by  the  commanding  officer. 


24  A  MANUAL,  FOR  POST  EXCHANGES 

(c)  Such   sum   as    the    council,   with   the   approval   of   the 
commanding  officer,  may  determine  will  be  appropriated  for  the 
benefit  of  the  entire  garrison  to  all  or  any  of  the  following  pur- 
poses :    Laying  out  and  preparing  and  cultivating  gardens  and 
supplying  seeds,  roots,  or  plants  for  the  same ;  the  purchase  of 
books,  newspapers,  periodicals,   stationery,  etc.,   for  the  post 
exchange  or  post  library ;  the  purchase  of  gymnastic  appliances 
when  there  is  no  gymnasium  connected  with  the  exchange ;  prizes 
for  athletic  sports.     The  expenditure  of  profits  for  purchases 
other  than  these  requires  the  approval  of  the  department  com- 
mander. 

(d)  "The  remaining  money  may  be  divided  among  the  or- 
ganizations  contributing  to   the   exchange   on   such   equitable 
basis  as  shall  be  determined  by  the  council  with  the  approval 
of  the  commanding  officer.     Normally  the  distribution  should 
be  made  to  organizations  according  to  the  number  of  rations 
drawn  by   them   for   the  period   covered  by   the   distribution. 
Where  differences  in  this  respect  arise  between  the  council  and 
commanding  officer  the  decision  of  the  department  commanding 
officer  will  be  final.     The  money  thus  distributed  will  be  paid 
into  the  company  or  detachment  funds.     In  addition  to  the 
dividends  for  the  hospital  detachment,  the  exchange  council, 
with  the  approval  of  the  commanding  officer,  shall  determine 
the  amount,  if  any,  to  be  turned  over  to  the  surgeon  for  the 
sick  in  the  hospital. 

Any  variation  from  these  rules  requires  the  sanction  of  the 
Secretary  of  War. 

A  division  of  the  cash  resources  after  all  debts  have  been 
paid  will  also  be  made  whenever  the  troops,  or  any  part  of 
them,  being  members  of  the  exchange,  change  station;  in  this 
event  no  deduction  on  account  of  the  reserve  fund  will  be  made 
from  the  share  of  the  withdrawing  troops. 

"The  amount  of  any  loss  that  an  exchange  may  sustain  in 
consequence  of  a  failure  of  a  soldier  to  pay  for  articles  properly 
bought  on  credit,  whether  by  his  discharge  without  sufficient 
money  due  on  his  final  statements  to  pay  the  debt,  or  by  his 
desertion,  will  be  deducted  from  the  share  of  the  profits  of  the 


REGULATIONS  FOR  POST  EXCHANGES  25 

company  or  organization  to  which  the  defaulter  belongs. 
Losses  by  fire  or  other  casualty,  death  of  the  debtor,  deprecia- 
tion of  value  of  the  fixtures,  and  deterioration  of  articles  kept 
for  sale,  and  the  accidental  breakage  of  fixtures  or  other 
property  will  be  borne  by  all  the  participating  organizations  in 
common,  and  should  be  deducted  from  the  gross  receipts  before 
dividing  profits.  Credit  accounts  should  be  treated  as  bills 
receivable  until  they  are  settled  or  found  to  be  a  loss,  but  bills 
receivable  should  not  be  included  in  the  gross  amount  from 
which  profits  are  resolved.  The  amount  of  cash  on  hand  on 
the  dates  specified,  after  all  mature  debts  are  paid  and  after 
setting  aside  as  a  reserve  fund  a  sum  sufficient  to  meet  antici- 
pated debts  for  a  period  not  less  than  one  month,  constitutes 
the  sum  subject  to  distribution.  (Par.  17.) 

42.  FINAL     DISPOSITION     OF     BUSINESS.     When 
notice  is  received  that  an  entire  garrison  of  a  post  is  to  be 
withdrawn   and   the   post   discontinued,   the   exchange   will  be 
reduced  to  the  lowest  extent  possible  and,  so  far  as  may  be, 
converted  into  cash.     Prior  to  the  departure  of  the  troops  the 
property  of  the  exchange  will  be  sold  and  the  proceeds,  together 
with  the  cash,  distributed  by  the  council  among  the  organiza- 
tions according  to  the  number  of  shares  held  by  each.     The 
exchange  officer  will  make  a  final  report  of  the  matter  through 
military  channels  to  the  adjutant  general  of  the  department. 
(Par.  18.) 

43.  REORGANIZATION.     Whenever    the    exchange 
council,  by  a  majority  vote,  holds  that  a  reorganization  of  the 
exchange  is  necessary,  and  that  the  interests  of  the  exchange 
can  best  be  subserved  by  this  course,  the  proceedings  of  the 
council  in  such  a  case,  when  approved  by  the  post  commander, 
will  be  forwarded  to  the  department  commander,  whose  decision 
thereon  will  be  final. 

If  the  proceedings  are  approved  by  the  department  com- 
mander, all  members  will  withdraw  from  the  exchange  at  the 
earliest  possible  date  after  the  receipt  of  the  approved  pro- 
ceedings at  the  post,  and  the  reorganization  will  be  made  effec- 
tive without  unnecessary  delay.  (Par.  19.) 


26  A  MANUAL  FOR  POST  EXCHANGES 

SUGGESTIONS  AS  TO  MANAGEMENT 

The  following  suggestions,  based  upon  the  systems  which 
have  been  found  most  satisfactory  by  experienced  exchange 
officers,  are  published  for  the  information  of  all  concerned. 

44.     SCHEME  FOR  KEEPING  ACCOUNT  OF  STOCK. 

All  stores  not  in  salesroom  should  be  kept  in  storeroom  under 
lock  and  key.  A  competent  employee  should  be  detailed  as 
storekeeper.  He  should  receive  all  stores  of  whatever  nature 
that  come  into  the  exchange  and  issue  the  stores  to  the  several 
departments,  on  requisitions  in  writing  approved  by  the  ex- 
change officer  or  the  steward.  (Form  A.) 

If  stores  in  one  department  are  needed  in  another,  they 
should  be  turned  in  to  the  storekeeper  on  approved  "Turn  in" 
card  (Form  B)  and  issued  on  approved  requisition.  Damaged 
or  spoiled  stores  should  be  entered  on  a  "Damage  Report" 
(Form  C),  which,  after  approval  by  the  exchange  officer  or 
steward,  should  be  turned  over  with  the  stores  to  the  store- 
keeper. 

The  storekeeper  should  be  provided  with  a  stock  record  in 
which  to  charge  the  storeroom  with  the  cost  of  all  stores  re- 
ceived and  credit  it  with  the  cost  of  all  stores  issued,  charging 
each  department  with  the  cost  of  stores  issued  thereto,  crediting 
each  department  with  the  cost  of  all  articles  sold  and  the  cost 
of  all  stores  turned  in  on  account  of  damage  or  otherwise.  (  See 
Form  D.) 

Vouchers  for  the  debit  entries  of  the  storeroom  account  will 
be  the  invoices  of  stores  received  and  approved  "Turn  in" 
orders,  and  for  the  credit  entries  approved  requisition.  Ap- 
proved receipted  requisitions  will  be  the  vouchers  for  the  debit 
entries  against  each  department;  and  sales  (cost  value  of 
articles),  "Turn  in"  orders,  and  damage  reports,  vouchers  for 
the  credit  entries. 

The  balance  on  hand  in  the  storeroom  and  in  each  depart- 
ment, as  shown  by  the  stock  book,  should  be  equal  to  the  total 
cost  of  the  articles  on  hand  in  each  as  determined  by  inventory. 

This  system  does  not  depend  on  the  names  of  individual 
articles,  except  as  to  inventory,  but  deals  only  with  the  total 
cost  values,  thus  eliminating  much  detail,  but  at  the  same  time 


REGULATIONS  FOR  POST  EXCHANGES  27 

showing  whether  or  not  the  stock  is  being  properly  accounted 
for. 

There  are  three  checks: 

(a)  For  all  articles  reported  sold  the  equivalent  in  cash, 
checks,  or  credit  must  be  turned  in  by  the  salesman. 

(b)  Should  a  salesman  report  less  than  he  actually  sells, 
he  will  be  short  at  the  end  of  the  month,  or  at  such  time  as  he 
may  be  checked  up.     All  shortages  should  be  made  good  by  the 
salesman. 

(c)  The  storeroom  and  each  department  may  be  checked  at 
any  time  by  taking  an  inventory,  determining  the  total  cost  of 
the  articles  found  on  hand,  and  comparing  the  same  with  the 
balances  shown  by  the  stock  record. 

The  stock  record  should  be  ruled  so  as  to  show : 

1.  The  total  cost  of  articles  on  hand  in  the  storeroom  at 
the  last  inventory. 

2.  The  total  cost  of  articles  received  into  the  storeroom 
since  the  last  inventory,  as  shown  by  invoices,  transfers  from 
departments,  etc. 

3.  The  total  cost  of  articles  on  hand  in  each  department  at 
the  last  inventory. 

4.  The  total  cost  of  articles  issued  to  each  department  on 
approved  requisitions. 

5.  Cost  of  articles  sold  from  each  department. 

6.  Cost  of  articles  turned  in  from  each  department. 

7.  Cost  of  stores  condemned. 

Another  method  whereby  verification  can  be  made  is  to  calcu- 
late the  value  at  selling  prices  of  all  articles  on  hand  at  the 
beginning  of  the  month  in  each  department  and  to  charge  it 
with  the  total;  then  charge  each  department  with  the  selling 
price  of  all  goods  issued  to  it ;  the  total  of  the  two  is  the  amount 
for  which  the  department  is  accountable.  Crediting  the  depart- 
ment with  the  amount  of  sales  and  with  the  value  of  goods  turned 
in,  damaged  or  spoiled  and  condemned,  at  the  selling  prices, 
gives  the  amount  accounted  for.  The  difference  between  the 
two  should  be  the  total  value  of  merchandise  on  hand  at  selling 
prices. 

45.  BILL  REGISTER.  The  exchange  officer  should  per- 
sonally enter  in  a  blank  book  labeled  "Bill  Register"  a  memo- 


28  A  MANUAL  FOR  POST  EXCHANGES 

randum  of  every  invoice  immediately  upon  receipt  of  the  same, 
noting  on  the  invoice  "B.  R. "  to  show  page  of  entry.  Re- 
ceipt of  merchandise  should  be  noted  both  on  the  invoice  and 
opposite  the  proper  entry  in  the  bill  register,  and  when  the  bill 
has  been  paid,  notation  to  that  effect  should  be  made  both  on 
the  invoice  and  opposite  the  proper  entry  in  the  bill  register. 

46.  INVOICE   FILE.      An   invoice   file   book   or   file   case 
should  also  be  kept.     After  entry  in  the  bill  register,  an  invoice 
should  be  put  on  a  temporary  file  to  be  kept  until  the  goods  shall 
have  been  received.     The  shipment  should  then  be  checked  with 
the  invoice,  which  should  then  be  placed  on  another  temporary 
file.     There  will  thus  be  a  file  of  invoices  of  goods  not  received 
and  a  file  of  invoices  of  goods  received.     From  time  to  time  the 
invoices  on  the  latter  mentioned  file  should  be  entered  in  the 
proper  books  and  the  place  of  entry  noted  on  each  invoice, 
after  which  the  invoice  should  be  placed  in  the  permanent  file. 

47.  SCHEME  FOR  SIMPLIFYING  ACCOUNTS  WITH 
FIRMS  WHEN  THE  EXCHANGE  IS  ON  A  CASH  BASIS. 

Enter  each  invoice  in  a  purchase  record,  as  shown  in  Form  E. 
(A  unit-ruled  blank  may  be  obtained  for  this  purpose  or  an 
ordinary  blank  may  be  ruled  as  indicated.)  When  the  bill  is 
paid,  enter  the  information  as  shown. 

This  system  is  suitable  only  when  the  exchange  is  on  a  cash 
basis.  It  has  the  advantage  of  showing  all  invoices  on  the 
same  account.  If  the  invoices  are  numbered  serially  and  bound, 
in  serial  order,  at  the  end  of  the  month,  auditing  is  facilitated. 
When  this  system  is  used,  the  bill  register  is  unnecessary. 

48.  SCHEME  FOR  SIMPLIFYING  ACCOUNTS  THAT 
ARE  PRACTICALLY  CASH  ACCOUNTS.    As  accounts  for 
merchandise  purchased  by  officers   and  organizations   are  re- 
quired to  be  settled  at  the  end  of  the  month,  and  are  practically 
cash  accounts,  the  following  scheme  will  reduce  clerical  work 
and  facilitate  auditing: 

All  charge  slips  are  entered,  as  received,  under  the  name  of 
the  purchaser,  in  a  duplicating  bill  file,  consisting  of  a  binder, 
containing  sheets  with  the  exchange  billhead  and  blank  sheets 
alternately.  The  name  of  the  purchaser  is  first  written  in  the 
billhead  and  then  the  charges  are  entered  from  the  charge  slips 


REGULATIONS  FOR  POST  EXCHANGES  29 

received  from  day  to  day,  the  whole  being  duplicated  on  the 
blank  sheet  by  carbon  process.  The  duplicate  should  be  re- 
tained and  the  original  sent  out  as  a  bill. 

49.  RESTAURANT    ACCOUNT.     A    separate    account 
should  be  opened  with  the  restaurant  (  or  lunch  counter) ,  as  this 
is  a  manufacturing  department  and  requires  careful  supervision 
to  enable  it  to  yield  suitable  profits.     This  account  should  show 
the  quantity  and  cost  of  all  articles  received  for  the  restaurant, 
cost  of  labor,  and  the  quantity  and  total  cost  of  all  articles  as 
made  up  for  sale. 

50.  ACCOUNT   OF    SALES.     Each   salesman   should   be 
required  to  keep  a  record  of  each  sale  made  by  him.     This  may 
be  kept  conveniently  on  a  duplicate  sales  pad.     If  the  system 
of  keeping  account   of  the   stock   described  herein   should  be 
adopted,  the  salesman  should  note  on  the  retained  slip  the  cost 
of  each  article  sold  and  should  enter  the  total  cost  of  the  sale 
shown  by  each  slip  on  a  tally  card  in  the  back  of  the  sales  pad. 
Credit  sales  must  be  shown  by  writing  the  name  of  the  purchaser 
at  the  top  of  the  slip.     Cash  and  check  sales  will  be  shown  by 
the  absence  of  the  name  of  the  purchaser.     Cash  slips  may  be 
marked  +   and  check  slips   #,  in  order  to  distinguish  them. 
At  the  close  of  the  day's  business  the  steward  should  receive 
from  each  salesman  the  tally  card  showing  the  total  cost  of  the 
articles  sold,  together  with  the  sales  slips  and  a  report  on  a 
form  similar  to  the  following: 


SALES  REPORT 

Fort 

,191 

Cash  - 

Checks   

Credit 


Total   

In  Charge. 


(This  should  accompany  the  steward's  report.) 


30 


A  MANUAL  FOR  POST  EXCHANGES 


The  steward  should  total  the  slips  under  each  head,  compare 
them  with  the  report,  and  check  the  total  of  all  sales  as  shown. 
He  should  also  total  the  cost  prices  of  the  articles  sold  by  each 
salesman  as  shown  by  the  tally  card,  and  should  see  that  the 
storekeeper  enters  the  same  in  the  stock  record  to  the  credit  of 
the  proper  department.  The  steward  should  also  see  that  the 
charge  slips  are  entered  on  the  proper  accounts  of  the  duplicate 
bill  file,  and  should  then  make  out  his  daily  report  to  the 
exchange  officer  on  a  form  similar  to  the  following: 


STEWARD'S  DAILY  REPORT 

Post  Exchange, 
Fort  

RECEIPTS 

Credits 

Checks 

Cash 

Total 

Restaurant 

Store   

Recreation  Room 
Etc    -  

Total  

Checks  Issued  $  
Received  Jfe 

*    *r 

....-,  191 

Steward. 

-  ? 
Exchange  Officer. 

51.  CHECKS  OR  COUPONS.  When  metal  checks  or 
paper  coupon  checks  are  used  they  should  be  carefully  ac- 
counted for  both  by  the  exchange  officer  and  the  steward.  The 
former  should  keep  an  accurate  account  of  the  value  of  both 
of  those  turned  over  by  him  to  the  steward  for  issue  and  of  those 
issued  by  the  steward  as  shown  by  his  daily  report.  The  total 
value  of  the  latter-mentioned  checks  or  coupons  should  be  re- 


REGULATIONS  FOR  POST  EXCHANGES  31 

garded  as  a  liability  until  redeemed.  The  steward  should 
charge  himself  in  his  account  with  the  value  of  all  checks  or 
coupons  turned  over  to  him  by  the  exchange  officer  and  credit 
himself  with  the  value  of  those  issued  by  him.  All  checks  or 
coupons  received  for  sales  should  be  turned  into  the  exchange 
officer  with  the  steward's  daily  report  and  their  total  value 
entered  by  the  exchange  officer  on  his  account.  All  paper 
coupons  so  turned  in  should  be  destroyed  by  the  exchange 
officer  in  person,  preferably  by  burning.  The  steward's  account 
need  not  show  the  value  of  the  checks  or  coupons  outstanding, 
as  this  may  at  once  be  determined  by  balancing  the  check  or 
coupon  account  of  the  exchange  officer. 

The  use  of  metal  checks  is  undesirable  for  obvious  reasons. 
The  paper  coupon-book  system  is  the  safest  and  most  generally 
satisfactory.  Although  the  first  cost  is  greater  than  in  the 
metal-check  or  punch-card  systems,  the  coupon-book  system 
is  usually  more  economical  in  the  end. 

52.  SALES  ON  CREDIT.  When  duly  authorized  as  pro- 
vided by  the  Post  Exchange  Regulations,  credit  within  pre- 
scribed limits  may  be  given  upon  the  request  of  the  soldier  in 
writing,  approved  by  his  company  commander.  For  the  con- 
venience of  the  men  themselves,  as  well  as  for  the  convenience 
of  the  company  commander  and  the  exchange  officer,  the  follow- 
ing system  of  regulating  this  credit  is  recommended : 

At  the  beginning  of  each  month  a  list  of  each  organization, 
in  the  order  in  which  the  names  appear  on  the  pay  rolls,  should 
be  prepared  and  the  amount  of  credit,  approved  by  the  com- 
pany commander  in  each  case,  should  be  entered  opposite  the 
name  of  the  man.  A  convenient  opportunity  to  sign  should  be 
given  to  all  men  who  desire  credit.  The  list  should  then  be 
corrected  by  drawing  a  line  through  the  name  of  any  man  who 
has  not  signed.  After  approval  by  the  company  commander 
it  should  be  sent  to  the  exchange  officer,  who  is  thus  informed 
of  the  amount  of  credit  authorized  in  each  case.  The  following 
form  may  be  conveniently  used : 


32  A  MANUAL  FOR  POST  EXCHANGES 

Company  " ,"  Infantry. 

We  request  credit  at  the  Post  Exchange  during  the  month 

of ,  191 ,  to  an  amount  not  exceeding  that  set 

opposite  our  respective  names. 


Names 

(In     the     order     in 
which     they     appear 

Credit 
approved 

Credit 
given 

Signatures 

on  pay   roll) 

Approved : 


Fort 


Captain Infantry, 

Commanding  Company. 

>  

191..... 


The  foregoing  specimen  form,  duly  completed,  should  be  the 
authority  upon  which  the  exchange  officer  should  extend  credit. 
This  form  should  usually  be  in  the  hands  of  the  steward,  to 
whom  the  men  should  apply  for  checks  or  coupon  books.  In 
large  garrisons  men  unknown  to  the  steward  should  be  identified. 
Upon  applying  to  the  steward  each  man  should  inform  him  of 
the  number  of  checks  or  value  of  coupon  book  desired.  This 
may  be  for  the  entire  amount  of  authorized  credit  or  for  any 
less  amount.  The  steward  should  then  make  out  a  note,  on  a 
form  similar  to  the  following,  which  should  be  signed  and  wit- 
nessed as  indicated,  after  which  the  steward  should  issue  to 
the  man  checks  or  a  coupon  book  equal  in  value  to  the  amount 
signed  for  and  note  the  amount  opposite  the  name  of  the  man 
on  the  company  list.  By  this  means  a  man  may  obtain  credit 
for  any  amount  less  than  that  authorized  and  subsequently 
may  obtain  the  remainder,  or  any  part  of  it,  in  a  similar  manner, 
in  each  case  signing  a  note  like  the  following: 


REGULATIONS  FOR  POST  EXCHANGES 


33 


191- 


Name 

Rank,  Etc. 
Amount    $ 


Fort , - ,  191 

I, ,  promise  to 

pay  to  the  Post  Exchange,  after  my 

next  payment, - Dollars, 

for  value  received. 


Signature  

Rank,  Etc. 


Witness 


Steward. 


The  stubs  are  the  steward's  vouchers  for  checks  issued  after 
he  turns  in  the  notes  with  his  daily  report.  The  exchange 
officer  should  compare  the  total  amount  of  the  notes  with  the 
item  "Checks  Issued"  on  the  steward's  daily  report. 

For  convenience,  the  list  of  names  and  amount  of  authorized 
credit  should  be  as  complete  as  practicable  when  sent  to  the 
exchange.  A  company  commander  may  send  such  supple- 
mentary lists  as  he  may  desire,  and  at  any  time  during  the 
month  may  request  a  modification  of  the  lists  pertaining  to  his 
company. 

One  great  advantage  of  this  system  is  that  men  may  get  any 
part  of  the  authorized  credit,  at  any  time  within  exchange  hours 
during  the  month,  by  applying  directly  to  the  exchange  officer 
or  steward. 

53.  COLLECTION  OF  NOTES.  Before  payment  of  the 
command,  the  exchange  officer  should  arrange  the  notes  of  each 
organization  in  the  order  in  which  names  appear  on  the  pay 
roll.  When  more  than  one  note  has  been  given  by  the  same 
man  they  should  be  pinned  together  and  the  total  marked  with 
colored  pencil  on  the  top  note.  These  notes,  in  connection 
with  the  list  or  lists  showing  the  credit  given  to  the  men  of 
each  organization,  give  all  information  needed  for  the  collec- 
tion. A  noncommissioned  officer  of  each  organization  should' 
be  detailed  to  report  to  the  exchange  officer  at  the  pay  tables 
to  identify  the  men. 


A  MANUAL  FOR  POST  EXCHANGES 


An  alternate  method  of  regulating  credit  sales  is  as  follows : 
Notes  of  the  following  form  are  kept  on  hand  by  the  organiza- 
tion commander: 


,  191 

Name 

Rank,  Etc 1 

Amount    $ 


Fort , ,  191 

I,  ,  promise  to 

pay  to  the  Post  Exchange,  after  my 
next  payment, Dollars, 


Signature  

Rank,  Etc. 


1st  Sergeant  Troop 


Commanding  Troop 


Upon  the  presentation  of  such  a  note  at  the  post  exchange, 
filled  in  and  duly  signed,  checks  or  a  coupon  book  for  an  equal 
amount  should  be  issued  to  the  man. 

Stubs  should  remain  in  the  possession  of  the  organization 
commander,  who  thus  knows  the  state  of  the  man's  credit  at  all 
times  without  reference  of  the  matter  to  the  post  exchange. 

Under  this  system  it  is  necessary  for  the  organization  com- 
mander to  submit  to  the  post  exchange  officer  on  the  day  before 
pay  day  a  list  of  the  names  of  the  men  of  his  organization  who 
have  obtained  credit  and  the  amount  thereof,  the  names  of  the 
men  appearing  in  the  same  order  in  which  they  appear  on  the 
pay  roll. 

54.  CASH  REGISTER.  When  practicable,  one  or  more 
cash  registers,  purchased  from  the  exchange  funds,  should  be 
used  in  the  exchange. 

The  turn-back  keys  of  cash  registers  should  be  kept  in  the 
hands  of  exchange  officer  to  enable  him  to  make  verification  of 
reports  made  from  the  registers. 


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38  A  MANUAL  FOR  POST  EXCHANGES 

SUGGESTING  AS  TO  AUDITING 

The  following  are  some  suggestions  for  auditing  which  are 
published  for  the  information  of  all  concerned: 

Count  cash  on  hand.  If  checks  are  in  the  cash,  they  should 
be  current  ones  and  should  be  immediately  deposited. 

Verify  bank  balance.  Obtain  a  list  of  outstanding  checks 
and  secure  direct  from  depository  confirmation  of  the  bank 
balance. 

Verify  all  additions  in  the  cash  book.  Call  for  the  steward's 
daily  report  and  see  that  all  cash  items  are  shown  on  the  cash 
book  and  that  other  items  are  properly  accounted  for. 

Compare  paid  checks  with  the  stubs  and  the  latter  with  the 
vouchers  and  disbursements  shown  by  the  cash  book.  For  all 
disbursements  there  should  be  a  proper  voucher.  In  case  of  a 
bill  or  invoice  being  paid  that  represents  a  purchase,  it  should 
show  on  its  face  proper  notations  to  indicate  when  the  goods 
or  materials  were  received;  that  they  were  properly  checked 
as  to  quantities,  quality,  and  prices ;  that  they  have  been  taken 
up  on  the  books,  and  that  the  voucher  is  correct  and  just. 

Verify  trial  balance  with  ledger. 

Posting  to  individual  accounts  in  ledger  should  be  checked 
against  the  cash  book  to  see  that  all  receipts  on  account  of  credit 
accounts  and  sales  have  been  taken  up. 

Count  bills  receivable  (enlisted  men)  on  hand  and  compare 
with  amount  shown  on  ledger  that  should  be  on  hand.  Verify 
whether  all  issues  and  payments  to  the  account  have  been  posted. 

Verify  check  account  to  see  the  amount  outstanding.  Any 
balance  should  always  appear  as  a  liability. 

Examine  stock  record.  The  amount  of  merchandise  on  hand 
at  beginning  of  month  at  selling  prices,  plus  amount  purchased 
at  selling  prices,  gives  the  amount  of  accountability.  If  from 
the  accountability  is  subtracted  the  amount  of  actual  sales  and 
goods  turned  in,  damaged  or  spoiled  and  condemned,  at  selling 
prices,  the  difference  should  be  the  value  of  goods  on  hand  at 
selling  prices. 


REGULATIONS  FOR  POST  EXCHANGES  39 

Check  the  closing  entries  to  profit  and  loss  account.  See 
whether  the  net  profit  or  loss  is  shown  on  the  exchange  account 
in  ledger. 

Check  all  postings  to  ledger. 

Examine  expense  account  and  see  that  all  expenditures  were 
proper. 

Obtain  a  list  of  accounts  due  the  exchange  and  a  list  of  out- 
standing liabilities.  Verify  accurateness  of  same  by  direct  con- 
firmation with  individuals  and  firms  concerned,  as  far  as  prac- 
ticable. Check  totals  with  statement  of  assets  and  liabilities. 
The  next  auditing  officer  should  ascertain  whether  any  of  these 
accounts  have  been  settled  since  last  audit  and  properly  entered 
on  the  books  of  the  exchange.  Make  special  notation  of  delin- 
quent accounts  due  the  exchange. 

Verify  all  items  on  statement  of  assets  and  liabilities  with 
ledger  accounts,  inventories,  and  other  records,  and  be  certain 
that  the  several  items  shown  on  the  statement  are  correct  and 
just. 

AMENDMENTS 


40  A  MANUAL  FOR  POST  EXCHANGES 


AMENDMENTS 


A  MANUAL  FOR  POST  EXCHANGES 


CHAPTER  II 
BOOKKEEPING  FOR  POST  EXCHANGES 

56.  Post    Exchange    Regulations,    Par.    14    (See    Par.    38 
above)   prescribes  that  a  double  entry  system  of  bookkeeping 
will  be  used.     G.   O.   No.   176,  W.  D.   1909,  which   formerly 
governed  the  operations  of  exchanges  and  prescribed  the  keep- 
ing of  certain  accounts  therein  enumerated,  did  in  fact  make 
double   entry   bookkeeping  necessary:    for  single  entry  book- 
keeping  is    possible    when   personal    accounts    only    are    kept. 
Those,   therefore,  who   labored  under  the  delusion  that   they 
were  formerly  keeping  their  accounts  in  single  entry,  were  in 
reality  keeping  them  in  a  complicated  and  unsystematic  double 
entry  method.     This  provision  should  cause  the  bookkeeping 
of  Post  Exchanges  to  be  done  in  a  much  more  simple  and  system- 
atic method  in  the  future. 

57.  ACCOUNTS.     The  transactions  common  to  a  business 
are  classified  into  accounts,  each  account  comprising  either  (1) 
those  transactions  that  are  alike,  or   (2)    those  transactions 
pertaining  to  the  same  person   or  to  the  same  thing.      Each 
transaction,  as  will  soon  be  seen,  is  always  included  in  two  or 
more  accounts  by  this  classification. 

The  accounts  common  to  any  business  are  as  follows : 

Capital  Stock  Account 

Cash  Account 

Building  and  Fixtures  Account 

Merchandise  Account 

Personal  Accounts 

Expense  Account 

Profit  and  Loss  Account. 

The  classification  of  accounts,  however,  may  be  extended  to 
suit  the  size  and  nature  of  the  business.  Instead  of  the  Build- 
ing and  Fixtures  Account,  there  may  be  a  Land  and  Buildings 
Account,  a  Store  and  Office  Fixtures  Account,  a  Plant  and 
Machinery  Account,  a  Delivery  Equipment  Account,  etc.;  the 
Merchandise  Account  may  be  divided  into  a  Purchase  Account, 


44  A  MANUAL  FOR  POST  EXCHANGES 

a  Sales  Account,  a  Merchandise  Inventory  Account,  and  a 
Trading  Account ;  the  Personal  Accounts,  into  Accounts  Pay- 
able, Accounts  Receivable,  Bills  Payable,  Bills  Receivable,  and 
Accounts  with  Attorneys ;  the  Expense  Account,  into  a  Selling 
or  Manufacturing  Expense  Account  and  a  General  Expense 
Account,  or,  more  detailed,  into  Insurance,  Taxes,  Rent,  Fuel> 
Freight  and  Express,  Collection  and  Exchange,  Interest  and 
Discount,  Advertising,  Salaries  and  Wages,  Repairs  and  Main- 
tenance, Depreciation,  L,ost  Accounts  and  Notes,  etc. 

58.  ENTRIES.  The  systematic  records  of  business  trans- 
actions made  to  accounts  are  called  entries. 

Entries  are  of  two  kinds,  debit  and  credit.  In  double  entry 
bookkeeping,  each  business  transaction  is  represented  by  a  debit 
and  a  credit  entry.  These  two  entries  of  a  transaction  are 
always  made  to  different  accounts :  they  can  never  be  made  to 
the  same  account.  Often  the  debit  or  credit  record  of  a  trans- 
action may  be  represented  by  two  or  more  debit  or  credit  entries, 
respectively.  In  such  cases  the  different  debit  or  credit  entries 
are  always  made  to  different  accounts. 

The  debit  entry  of  a  transaction  is  always  equal  to  the  credit 
entry  of  that  transaction ;  or,  in  case  of  compound  entries,  the 
sum  of  the  debit  entries  of  a  transaction  is  always  equal  to  the 
sum  of  the  credit  entries  of  that  transaction.  For  example,  if 
an  exchange  pays  an  account  of  $100  and  receives  2%  cash  dis- 
count, the  debit  entry  will  be,  "Accounts  Payable — $100.00," 
and  the  credit  entries,  "Cash — $98.00"  and  "Discount — $2.00." 
Expressed  in  the  common  Journal  form  the  entries  would  read: 

Accounts  Payable,  Dr.  $100.00 

To  Cash  $98.00 

To  Discount  2.00 

Since  the  debit  entry  of  a  transaction  is  always  equal  to  the 
credit  entry  of  that  transaction,  the  sum  of  the  debit  entries  of 
all  transactions  for  a  given  period  is  always  equal  to  the  sum 
of  the  credit  entries  of  all  transactions  for  that  period.  The 
sum  of  the  debit  entries  to  any  account,  however,  may  or  may 
not  be  equal  to  the  sum  of  the  credit  entries  to  that  account. 
The  excess,  if  any,  of  the  debit  or  credit  side  of  an  account  is 


BOOKKEEPING  45 

called  the  "balance"  of  that  account.  If  the  debit  side  is  the 
greater,  the  excess  is  called  a  debit  balance ;  if  the  credit  side  is 
the  greater,  a  credit  balance.  If,  therefore,  all  entries  have 
been  made  and  made  correctly,  the  sum  of  the  debit  balances 
will  equal  the  sum  of  the  credit  balances. 

59.  THE    LEDGER.     All    the    accounts    of    a    business, 
except  the  Cash  Account,  are  usually  kept  in  the  Ledger  which 
is  the  book  of  classified  accounts.     It  is  also  called  the  account 
book  of  final  and  complete  entry.     When  the  business  is  large, 
special   ledgers   are   provided   for  personal   accounts,   and   are 
known  at  the  Creditors'  and  Customers'  Ledgers. 

60.  THE  JOURNAL.     It  is  at  once  apparent  that  if  it 
were  attempted  to  post  the  entries  of  each  transaction  to  their 
respective  accounts  in  the  Ledger  at  the  time  the  transaction 
takes  place,  much  time  would  be  lost  in  finding  the  accounts 
desired.      Entries   are   therefore   first  made  to   a   few  account 
books  of  original  entry  and  are  later  posted  therefrom  to  their 
respective  accounts  in  the  different  ledgers. 

For  this  purpose  entries  may  be  divided  into  the  following 
classes : 

(1)  Cash  receipts 

(2)  Cash  expenditures 

(3)  Credit  purchases 

(4)  Credit  Sales 

(5)  All  other  transactions. 

All  entries  of  class  (5)  are  first  made  to  the  Journal.  Each 
entry  to  the  Journal  should  include:  (1)  the  date,  (2)  the 
account  or  accounts  to  be  debited  and  the  amount  or  amounts, 
(3)  the  account  or  accounts  to  be  credited  and  the  amount  or 
amounts,  and  (4)  an  explanation  of  the  transaction. 

JOURNAL 


L.F. 

Account  to  be  debited. 
Account  to  be  credited.  £*plaimtioa. 

Dr. 

Or. 

Sep.  15,  1915. 

57 
88 

Bills  Receivable,  Dr.      Accepts  our  T/D  for  30 
To  Frank  Jonee          days  dated  9/13/15. 

75 

00 

75 

00 

The  words  "Dr."  and  "To"  are  generally  omitted. 


46  A  MANUAL  FOR  POST  EXCHANGES 

The  Journal  was  formerly  used  as  an  account  book  of  inter- 
mediate entry,  all  entries  in  the  Day  Book  and  other  account 
books  of  original  entry  being  first  abstracted  in  the  Journal 
before  being  posted  to  their  respective  accounts  in  the  Ledger. 
Business  men  however,  have  long  since  eliminated  this  unneces- 
sary work  and  red  tape. 

61.  CASH  BOOK.  To  the  Cash  Book,  or  Account,  (1)  all 
cash  receipts  are  debited  and  (2)  all  cash  expenditures  are 
credited.  Each  entry  of  a  cash  receipt  should  include:  (1) 
the  date,  (2)  the  account  to  be  credited,  (3)  an  explanation  of 
the  transaction,  and  (4)  the  amount. 

CASH  RECEIPTS 


Date.. 

Account  to  be  credited. 

Explanation. 

(Cash   HOther  Cash 
Sales.  ||  Rece  -pts. 

Sep. 

7 

John  Miller 

Acct.  in  full. 

9/1/15 

1  60 

00 

Each  entry  of  cash  expenditures  should  include:  (1)  the 
date,  (2)  the  account  to  be  debited,  (3)  an  explanation  of  the 
transaction,  and  (4)  the  amount. 


CASH  EXPENDITURES 


Date.      Account  to  be  debited.       I&planation. 


Cash 

rchases 


Sen. 


Freight  &  Express       S.P.Ry.,  Prt.  on  Hdse.  7  10 

The  Cash  Book  performs  the  functions  of  two  account  books : 
(1)  that  of  a  Journal  for  all  cash  transactions,  and  (2)  that 
of  a  Ledger  for  the  Cash  Account. 

62.  THE  PURCHASE  BOOK.  To  the  Purchase  Book  are 
posted  directly  all  credit  purchases  made  by  the  business.  Each 
entry  to  this  book  should  include:  (1)  the  date,  (2)  the 
account  to  be  credited,  (3)  the  date  and  terms  of  the  invoice,  and 
(4)  the  amount. 

The  Purchase  Book  performs  two  functions:  (1)  that  of  a 
Journal  for  all  credit  purchases,  and  (2)  that  of  an  auxiliary 
account  book*  to  the  Ledger  for  the  Purchase  Account. 

"In  the  Model  Set  of  Accounts,  Chapter  III,  the  Purchase  and  Sales  Books  per- 
form thf  functions  of  the  Ledger  for  the   Purchase  and  Sales  Accounts,  respectively. 


BOOKKEEPING  47 

63.  THE  SALES  BOOK.     To  the  Sales  Book  are  posted 
directly  all  credit  sales  made  by  the  business.     Each  entry  to 
the  Sales  Book  should  include:   (1)  the  date,  (2)  the  account  to 
be   debited,    (3)    address   and   terms,   if   special,   and   (4)    the 
amount. 

The  Sales  Book  performs  two  functions:  (1)  that  of  a 
Journal  for  all  credit  sales,  and  (2)  that  of  an  auxiliary  account 
book*  to  the  Ledger  for  the  Sales  Account. 

64.  THE   COUPON  ISSUE   BOOK.     In  post  exchanges 
where  credit  is  extended  to  enlisted  men  through  the  issue  of 
checks  or  coupons,  the  use  of  a  special  account  book  of  original 
entry,  called  the  Coupon  Issue  Book,  will  eliminate  the  entering 
of  such  issues  in  the  Journal,  and  at  the  same  time  furnish  an 
account  record  of  them.     This   account  book   should  have   a 
money  column  for  each  organization  that  is  a  member  of  the 
exchange,  and  an  extra  column  for  totals. 

The  Coupon  Issue  Book  performs  two  functions:  (1)  that 
of  a  Journal  for  coupon  issues,  and  (2)  that  of  an  auxiliary 
account  book  to  the  Ledger  for  the  Coupon  Account. 

65.  DEPARTMENT  ACCOUNTS.     In  case  it  is  desired 
to  keep  records  of  purchases  and  sales  by  departments,  separate 
columns  for  each  department  can  be  provided  for  in  the  Cash, 
Purchase,  and  Sales  Books. 

I. 

The  following  accounts  are  prescribed  by  the  Post  Exchange 
Regulations : 

66.  THE  CASH  ACCOUNT.     The  Cash  Account  is  kept 
in  the  Cash  Book.      Extra  columns  may  be  provided  on  the 
credit  side  of  the  Cash  Book  for  discounts  received,  and  for 
operating  expenses. 

Debit  Cash  Boole  with  all  cash  receipts. 
Credit  Cash  Book  with  all  cash  expenditures. 

67.  THE    POST    EXCHANGE    ACCOUNT.     This    ac- 
count is  carried  in  the  Ledger  and  its  balance  represents  the 
value  of  the  exchange. 

Credit  Post  Exchange  Account  with  working  capital,  re- 
serve fund,  buildings,  furniture,  and  fixtures. 

*In  the  Model  Set  of  Accounts,  Chapter  III,  the  Purchase  and  Sales  Books  per- 
form the  functions  of  the  Ledger  for  the  Purchase  and  Sales  Accounts,   respectively. 


48  A  MANUAL  FOR  POST  EXCHANGES 

Debit  Post  Exchange  Account  with  all  sales  of  and  all 
depreciations  in  building,  furniture,  and  fixtures,  and 
reductions  in  working  capital. 

68.  MERCHANDISE  ACCOUNT.     This  account  is  car- 
ried in  the  Ledger  as  a  controlling  account,  the  total  of  pur- 
chases and  sales  for  the  month  being  carried  forward  from  the 
Purchase  Book  and  Sales  Book,  respectively. 

Debit  Merchandise  Account  with  all  merchandise  on  hand 
at  the  beginning  of  the  month  or  quarter  (per  inventory 
at  cost  price)  ;  with  all  merchandise  purchases  (at  cost 
price)  ;  and  with  all  merchandise  returned  to  us  (at 
selling  price). 

Credit  Merchandise  Account  with  all  merchandise  sales 
(at  selling  price)  ;  with  all  merchandise  returned  by  us 
(at  cost  price)  ;  and  with  all  merchandise  on  hand  at 
the  end  of  the  month  or  quarter  (per  inventory  at  cost 
price). 

The  excess  of  the  credit  side  represents  the  Gross  Profit. 
The  "Merchandise  on  Hand"  at  the  beginning  of  the  month, 
and  the  "Total  Purchases"  are  debited  to  the  Trial  Balance, 
while  the  "Total  Sales"  is  credited  to  the  Trial  Balance. 

69.  BILLS    RECEIVABLE     (ENLISTED    MEN).     A 
Bills  Receivable  Account  is  carried  for  each  organization  that 
is  a  member  of  the  Exchange,  to  which  is  debited  on  the  last 
day  of  the  month  the  total  value  of  all  notes  given  by  the  en- 
listed men  of  that  organization  for  coupons  or  checks.     Separ- 
ate entry  for  each  individual  note  is  not  made  to  this  account. 

Debit  Bills  Receivable  (Enlisted  men)  with  the  total  value 
of  notes  given  by  the  enlisted  men  of  an  organization  for 
coupons. 

Credit  Bills  Receivable  (Enlisted  men)  with  the  total  collec- 
tion from  that  organization  on  pay  day;  with  amounts 
deducted  from  dividends  of  that  organization  to  cover 
individual  notes  not  paid  by  the  men ;  with  amounts 
received  from  quartermasters  for  notes  collected  on  pay 
rolls ;  and  with  amounts  lost  on  notes  through  death  of 
soldiers,  etc.,  also  with  notes  paid  by  enlisted  men  at 
times  other  than  pay  days. 


BOOKKEEPING  49 

70.  BILLS  RECEIVABLE   (NOTES).     This  account  is 
carried  in  the  Ledger  to  show  notes  given  by  members  of  the 
exchange  in  payment  or  part  payment  of  capital  stock,  etc. 

Debit  Bills  Receivable  (Notes)  with  all  notes  given  to  the 
exchange  by  members  for  capital  stock,  etc. 

Credit  Bill  Receivable  (Notes)  with  all  cash,  dividend 
credits,  etc.,  given  by  members  in  payment  of  their  notes. 

71.  CHECK  ACCOUNT.     The  Check  Account,  or  Coupon 
Account,  shows  the  total  coupon  issue,  coupon  sales,  and  cou- 
pons outstanding. 

Credit  Check  Account  at  the  end  of  the  month  with  the 
total  value   of   checks,   or   coupons,  issued  during  the 
month,  as  shown  by  the  Coupon  Issue  Book. 
Debit  Check  Account  at  the  end  of  the  month  with  the 
total  value  of  coupon  sales,  as  shown  by  the  Sales  Book. 
The  balance  represents  the  value  of  Coupons  Outstanding 
at  the  end  of  the  month. 

72.  ACCOUNTS   RECEIVABLE.      An   Account   Receiv- 
able is  opened  for  each  person  who  carries  a  credit  business 
with  the  exchange.      See  38,  3,  f. 

Debit  Accounts  Receivable  at  the  end  of  the  month  with 
the  total  values  of  all  credit  sales  to  customers. 

Credit  Accounts  Receivable  with  all  payments  on  their  ac- 
counts by  customers. 

73.  ACCOUNTS    PAYABLE.     An    Account    Payable    is 
opened  in  the  Ledger  for  each  firm  from  whom  merchandise  is 
bought. 

Credit  Accounts  Payable  with  all  purchases  made  from 
creditors. 

Debit  Accounts  Payable  with  all  payments  made  to  credi- 
tors. 

74.  EXPENSE  ACCOUNT.     This  account  is  carried  in 
the  Ledger. 

Debit  Expense  Account  with  any  of  the  following: 
(a)      Compensation  of  attendants. 


50  A  MANUAL,  FOR  POST  EXCHANGES 

(b)  Unavoidable  breakage,  wastage,  destruction,  dam- 
age.* 

(c)  Insurance  on  merchandise,  furniture,  fixtures,  and 
building,  if  the  property  of  the  exchange. 

(d)  The  cost  of  books,  blanks,  and  other  stationery; 
necessary   policing   about    quarters,   when    not    per- 
formed   by    the    regular    attendants;    express    and 
freight    charges    that    are    neither    merchandise    nor 
permanent  fixtures. 

75.  BUILDING    AND    FIXTURES    EXPENSE    AC- 
COUNT.    This  account  is  carried  in  the  Ledger. 

Debit  Building  and  Fixtures  Expense  Accownt  with  all 
expenditures  for  the  betterment,  repair,  and  renewal 
of  building  and  fixtures;  and  with  all  depreciations  in 
value  of  buildings  and  fixtures. 

Whenever  this  account  is  debited  with  a  depreciation  on 
fixtures,  the  net  profits  will  be  decreased  by  the  amount  of  the 
depreciation,  and  the  value  of  such  fixtures  as  shown  in  the 
Post  Exchange  account  must  therefore  be  decreased  by  the 
same  amount.  In  other  words,  when  moneys  are  taken  from 
net  profits  to  cover  actual  decrease  in  value  of  buildings  and 
fixtures,  the  value  of  the  Post  Exchange  should  remain  the 
same. 

76.  PROFIT  AND   LOSS.     The  gross   profit,   as   deter- 
mined in  Merchandise  Account,  Par.   66,  minus   all  expenses 
gives   the   net  profit   for   the   period  which   the   trial  balance 
covers ;  or  arranged  in  two  columns  the  Profit  and  Loss  is  shown 
as  follows: 

Expense  Account  Gross  Profit 

Building  and  Fixtures  Ex- 
pense Account 
Net  Profit 


77.  DIVIDEND  ACCOUNT.  This  account  shows  all  net 
profits  declared  as  dividends  and  the  distribution  of  the  same 
to  the  several  members  of  the  exchange. 

*See  footnote  to  par.  40    (b). 


BOOKKEEPING  51 

Credit  Dividend  Account  with  all  net  profits  declared  as 

dividends. 
Debit  Dividend  Account  with   all  dividends  paid  to  the 

members  of  the  exchange. 

II. 

7^.  In  order  better  to  meet  the  requirements  of  efficient 
accounting  the  following  classification  of  accounts  for  post 
exchanges  is  presented.  While  the  number  of  accounts  is 
greater  than  that  prescribed,  this  classification  simplifies  the 
bookkeeping,  and  shows  the  assets  and  liabilities  of  an  exchange 
in  a  much  more  complete  and  intelligent  manner. 

Any  account  not  needed  in  a  particular  exchange  can  of 
course  be  omitted,  while  in  large  exchanges  the  expense  accounts 
may  be  further  subdivided  if  desired.  In  most  exchanges,  how- 
ever, the  accounts  described  will  be  found  both  necessary  and 
sufficient. 

Under  each  account  will  be  found  not  only  specific  instruc- 
tions for  the  posting  of  entries  to  that  account,  but  the  other 
accounts  to  which  the  same  entries  must  also  be  posted. 

79.  CAPITAL  STOCK  ACCOUNT.  At  the  opening  of 
a  post  exchange  this  account  is  opened  in  the  Ledger  to  show 
the  capitalization  of  the  same.  The  membership  and  capitaliza- 
tion of  post  exchanges  are  prescribed  in  Post  Exchange  Regu- 
lations, See  par.  33. 

Credit  Capital  Stock  Account  for  all  shares  of  capital 
stock  sold. 

Debit  Cash  Account  with  all  moneys  received  from 

the  sale  of  capital  stock. 

Debit  Bills  Receivable  with  all  notes,  or  other  securi- 
ties, which  are  received  in  lieu  of  money  for  capital 
stock. 

Debit  Capital  Stock  Account  with  all  reductions  in  capital 
stock. 

Credit  Cash  Account  with  all  moneys  paid  out  in  buy- 
ing back  capital  stock. 


52  A  MANUAL  FOR  POST  EXCHANGES 

Credit  Bills  Payable  with  all  notes,  or  other  securities, 
given  in  payment  for  capital  stock  bought  back. 

80.  CASH  ACCOUNT.     This   account  is  carried  in  the 
Cash  Book.    It  consists  of  all  cash  transactions  of  the  business, 
and  its  balance  represents  the  total  amount  of  cash  on  hand 
and  in  bank.      Separate  accounts  for  cash  in  post  exchange 
and  cash  in  bank  can  be  kept,  but  a  single  cash  account  cover- 
ing both   is    recommended,   depositing   in   bank   each   day    all 
moneys    received,    and   making    cash    expenditures    by    checks. 
The  endorsed  check  makes  an  excellent  receipted  voucher  for 
an  expenditure,  especially  if  a  voucher  check  be  used;  and  at 
any  time  the  balance   of  the  Cash  Account  minus   the  bank 
balance,  as  shown  by  the  balance  carried  forward  on  the  check 
stubs,  equals  the  amount  of  cash  on  hand  in  the  exchange. 

Debit  Cash  Accowit  with  each  cash  receipt. 

Credit  the  other  account  to  which  the  cash  receipt  per- 
tains. 
Credit  Cash  Account  with  each  cash  expenditure. 

Debit  the  other  account  for  which  the  cash  expendi- 
ture was  made. 

The  total  cash  sales  for  each  day,  as  shown  by  the  steward's 
daily  sales  report,  should  be  debited  to  the  Cash  Account  in 
one  entry,  but  all  cash  receipts  and  expenditures  that  pertain 
to  other  accounts  should  be  entered  separately. 

The  exchange  officer  should,  if  practicable,  issue  all  checks 
for  expenditures  a  sufficient  number  of  days  before  the  monthly, 
or  quarterly,  trial  balance  to  allow  the  presentation  and  pay- 
ment of  the  same  at  the  bank  on  which  drawn  before  the  taking 
of  the  trial  balance,  and  on  the  day  of  the  trial  balance  secure 
a  statement  from  the  bank  showing  the  balance  of  the  exchange 
account  on  that  date.  Checks  not  yet  presented  to  the  bank  for 
payment  must  be  deducted  from  balance  at  bank  as  given  in  the 
statement  rendered  by  the  bank.  The  last  check  stub  used 
should  show  the  true  bank  balance.  The  check  stubs  and  cash 
account  entries  are  evidential  of  all  checks  outstanding. 

81.  BUILDING  AND  FIXTURES  ACCOUNT.     Build- 
ing and  fixtures,  the  latter  including  furniture,  cash  registers, 


BOOKKEEPING  53 

typewriters,  adding  machines,  safes,  office  desks,  filing  cabinets, 
show  cases,  counters,  etc.,  are  fixed  assets.  Their  original  costs 
are  debited  to  the  Building  and  Fixtures  Account  which  is 
carried  in  the  Ledger. 

Debit  Building  and  Fixtures  Account  with  the  cost  of  all 
buildings  and  fixtures  purchased. 

Credit  Cash  Account  with  all  moneys  expended  in  pur- 
chase of  buildings  and  fixtures. 

Credit  Building  and  Fixtures  Account  with  all  buildings 
and  fixtures  sold  (at  selling  price)  ;  and  with  all  depre- 
ciations declared  on  buildings  and  fixtures. 

Debit  Cash  Account  with  all  moneys  received  from 

sale  of  buildings  and  fixtures. 

Debit  Building  and  Fixtures  Expense  Account  with  all 
depreciations  declared  on  buildings  and  fixtures. 

Expenditures  for  the  upkeep  and  repair  of  buildings  and 
fixtures  should  not  be  charged  to  the  Building  and  Fixtures 
Account,  but  to  the  Building  and  Fixtures  Expense  Account. 
No  expenditure  on  buildings  and  fixtures  should  be  charged  to 
the  Building  and  Fixtures  Account  unless  it  actually  increased 
the  market  value  of  the  same,  such  as  the  purchase  of  new 
fixtures,  additions  to  buildings,  etc.  Expenditures  for  repairs, 
etc.,  which  merely  preserve  and  prevent  deterioration,  do  not 
increase  the  market  value.  To  debit  Building  and  Fixtures 
Account  with  repairs,  etc.,  makes  fictitious  assets  out  of  pure 
expenses. 

Where  no  funds  are  created  to  offset  depreciations  in  value  of 
buildings  and  fixtures,  a  part  of  the  dividends  each  month  will 
actually  come  out  of  the  capital  stock,  but  this  will  usually  never 
be  realized  until  the  assets  are  all  turned  into  cash  at  their  pres- 
ent worth  at  the  close  of  the  exchange  a  few  years  hence  when  the 
shares  of  the  capital  stock  will  be  found  to  be  worth  only  a 
fraction  of  their  par  value.  Appreciations  are  very  seldom 
noted,  even  when  there  has  been  a  general  rise  in  the  value  of 
real  estate  and  buildings.  They  should  be  shown,  however, 
in  case  of  land  and  buildings  if  the  accounts  are  to  represent 


54  A  MANUAL  FOR  POST  EXCHANGES 

the  true  condition   of  the  business.      Such   appreciations   are 
commonly  known  as  the  "unearned  increment." 

Buildings  depreciate  from  nil  to  5%  a  year  in  value;  and 
furniture  and  fixtures  from  7^/2%  to  10%  a  year  in  value.  It 
is  customary  in  all  businesses  to  deduct  a  sufficient  amount  from 
the  Net  Profits  to  cover  this  depreciation  in  buildings  and 
fixtures. 

82.  MERCHANDISE  ON  HAND  ACCOUNT.     This  is 
an  asset  account  to  show  the  value  of  merchandise  on  hand  at 
the  close  of  the  month  or  quarter.     If  merchandise  were  bought 
and  sold  at  the  same  price,  this  account  could  be  kept  just  the 
same  as  the  Cash  or  any  other  asset  account,  i.  e.,  debits  would 
represent  purchases   of  merchandise,   credits   would   represent 
sales,  and  the  balance,  the  value  of  merchandise  on  hand.     But 
the  selling  price  is  generally  greater,  so  instead  of  entering 
the  debits  and  credits  to  this  account  to  obtain  its  balance, 
an  actual  inventory  is  taken  of  the  merchandise  on  hand  to 
determine  it. 

This  balance  also  represents  the  value  on  hand  at  the  begin- 
ning of  the  ensuing  month,  and  as  such  appears  in  the  Trial 
Balance  of  that  month  as  an  asset. 

83.  PURCHASE  ACCOUNT.     This  account  is  carried  in 
the  Purchase  Book  to  show  all  purchases  of  merchandise. 

Debit  Purchase  Account  with  all  purchases  of  merchandise. 
Credit  Accounts  Payable  with  all  credit  purchases. 
Credit  Cash  Account  with  all  cash  purchases. 
Credit  Purchase  Account  with  all  merchandise  returned  by 
us. 

Debit  Accounts  Payable  with  all  merchandise  returned 
by  us. 

84.  SALES  ACCOUNT.     This  account  is  carried  in  the 
Sales  Book  to  show  all  credit,  coupon,  and  cash  sales. 

Credit  Sales  Account  with  all  sales  of  merchandise. 
Debit  Accounts  Receivable  with  all  credit  sales. 
Debit  Coupon  Account  with  all  coupon  sales. 
Debit  Cash  Account  with  all  cash  sales. 


BOOKKEEPING  55 

Debit  Sales  Account  with  all  merchandise  returned  to  us. 
Credit  Accounts  Receivable  or  other  proper  accounts 

with  all  merchandise  returned  to  us. 

Merchandise  on  hand,  purchases,  and  sales  were  formerly 
entered  to  the  Merchandise  Account.  This  account  is  now 
obsolete  in  modern  business  practice.  The  gross  profit  is  ob- 
tained from  the  Trading  Account,  which  might  be  called  a 
merchandise  controlling  account. 

85.  COUPON  ACCOUNT.     This  is  a  liability  account  of 
the  exchange  carried  in  the  Ledger  to  show  the  total  amount  of 
coupons,  or  checks,  issued  and  the  total  amount  of  coupon  sales 
for  the  month,  the  excess  of  the  former  representing  the  value 
of  coupons,  or  checks,  outstanding  at  the  end  of  the  month. 
It   is   designated   as    the   Check   Account   in   Post   Exchange 
Regulations. — par.  38,  3,  e. 

Credit  Coupon  Account  with  the  total  value  of  coupons 
issued  as  shown  by  the  Coupon  Issue  Book. 

Debit  Bills  Receivable  (Enlisted  men)  with  the  total 
value  of  coupons  issued  to  each  organization  as 
shown  by  the  Coupon  Issue  Book. 

Debit  Coupon  Account  with  tota-1  amount  of  coupon  sales 
as  shown  by  the  Sales  Book. 

Credit  Sales  Account  with  total  amount  of  coupon 
sales  as  shown  by  the  Sales  Book. 

86.  ACCOUNTS  RECEIVABLE.     Under  this  caption  is 
carried  a  personal  account  with  each  customer  to  whom  credit 
is  extended.      See  38,  3,  f. 

Debit  Accounts  Receivable  with  the  total  value  of  all  credit 
sales  to  each  customer. 

Credit  Sales  Account  with  the  total  value  of  all  credit 
sales  for  the  day  as  shown  by  the  Steward's  daily 
report. 

Credit  Accounts  Receivable  with  all  moneys  paid  by  cus- 
tomers in  payment  of  their  credit  accounts;  and  with 
all  merchandise  returned  by  them. 

Debit  Cash  Account  with  all  moneys  received  from 
customers  to  pay  their  credit  accounts. 


56  A  MANUAL,  FOR  POST  EXCHANGES 

Debit  Sales  Account  with  all  merchandise  returned 
by  customers. 

87.  ACCOUNTS  PAYABLE.     Under  this  caption  is  car- 
ried a  personal  account  with  each  firm  from  whom  goods  are 
bought. 

Credit  Accounts  Payable  with  the  total  value  of  each  bill 
of  merchandise  purchased. 

Debit  Purchase  Account  with  the  total  value  of  each 

bill  of  merchandise  purchased. 

Debit  Accounts  Payable  with  all  moneys  paid  out  in  pay- 
ment of  merchandise  bought  on  time ;  and  with  all  mer- 
chandise returned  by  us. 

Credit  Cash  Account  with  all  moneys  paid  out  in  pay- 
ment of  merchandise  bought  on  time. 
Credit  Purchase  Account  with  all  merchandise  returned 
turned  by  us. 

88.  BILLS    RECEIVABLE.     In    post    exchanges,    bills 
receivable  are  divided  into  two  classes,  (1)  Enlisted  Men,  and 
(2)  Notes. 

Of  Enlisted  Men :  Enlisted  men  give  their  notes  for  coupons, 
but  a  personal  account  is  not  opened  in  the  account  books  of 
the  exchange  for  each  enlisted  man.  Instead,  a  personal  ac- 
count is  opened  with  each  organization  to  which  is  debited  the 
total  coupon  issue  for  the  month  to  the  men  of  that  organiza- 
tion. 

Debit  Bills  Receivable  (Enlisted  men)  with  the  total  value 
of  coupons  issued  to  each  organization  as  shown  by  the 
Coupon  Issue  Book. 

Credit  Coupon  Account  with  the  total  value  of 
coupons  to  all  organizations  as  shown  by  the 
Coupon  Issue  Book. 

Credit  Bills  Receivable  (Enlisted  men)  with  the  total  cash 
collection  from  each  organization  on  pay  day;  with 
any  deductions  from  dividends  of  organization  for  notes 
of  enlisted  men  of  that  organization  unpaid,  with 
amounts  received  from  quartermasters  for  notes 


BOOKKEEPING  57 

collected  on  pay  roll;    and  with  amounts  lost  on  notes 
through  death  of  soldiers,  etc. 

Debit  Cash  Account  with  the  total  amount  of  cash 
collected  from  enlisted  men  of  each  organization  on 
pay  day  in  payment  of  their  coupon  notes. 
Debit  Dividend  Account  with  any  deductions  from  the 
dividends  paid  any  organization  to  cover  coupon 
notes  of  men  of  that  organization  unpaid. 
Of  Notes :    The  notes  referred  to  here  are  restricted  to  notes 
given  by  organizations  who  are  members  of  a  post  exchange  in 
payment,  or  in  part  payment,  of  their  shares  of  the  capital 
stock.     The  Post  Exchange  Regulations  do  not  contemplate 
customers  of  post  exchanges,  to  whom  regular  credit  is   ex- 
tended, giving  their  notes. 

Debit  Bills  Receivable  with  all  notes  given  by  organizations 
of  a  post  exchange  in  payment,  or  part  payment,  of 
shares  of  capital  stock. 

Credit  Capital  Stock  Account  with  all  shares  of 
capital  stock  sold  to  organizations,  the  payment 
for  which  is  covered  by  notes. 

Credit  Bills  Receivable  with  all  moneys  received  from  or- 
ganizations in  payment  of  their  notes. 

Debit  Cash  Account  with  all  moneys  received  from 
organizations  in  payment  of  their  notes. 

89.  BILLS  PAYABLE.  This  account  shows  all  notes 
given  by  the  exchange  to  members  in  buying  back  capital  stock. 
The  Post  Exchange  Regulations  do  not  contemplate  post 
exchanges  giving  their  notes  to  cover  purchases  of  merchandise 
from  firms. 

Credit  Bills  Payable  with  all  notes  given  by  the  exchange 
in  buying  back  capital  stock  held  by  withdrawing  or- 
ganizations. 

Debit  Capital  Stock  Account  with  all  shares  of  capi- 
tal stock  bought  back  from  withdrawing  organiza- 
tions. 

Debit  Bills  Payable  with  all  amounts  paid  to  organizations 
on  our  notes  to  them. 


58  A  MANUAL  FOR  POST  EXCHANGES 

Credit  Cash  Account  with  all  amounts  paid  to  organi- 
zations on  our  notes  to  them. 

90.  DIVIDEND  ACCOUNT.     This  account  is  carried  in 
the  Ledger  to  show  all  net  profits  declared  as  dividends,  and  the 
distribution  of  the  dividends  to   the   several  members   of  the 
exchange.     Dividends  not  paid  are  carried  as  a  liability  to  the 
trial  balance  and  balance  sheet  under  the  caption  of  "Dividends 
Unpaid."     The  distribution  of  dividends  to  members  of  post 
exchanges  is  explained  in  par.  41. 

Credit  Dividend  Account  with  all  Net  Profits  declared  to 
dividends. 

Debit  Profit  and  Loss  with  all  Net  Profits  declared  to 

dividends. 

Debit  Dividend  Account  with  all  dividends  paid  to  organi- 
zations. 

Credit  Cash  Account  with  all  dividends  paid  in  cash  to 
organizations. 

91.  RESERVE  FUND  ACCOUNT.     "When  an  exchange 
is  absolutely  free  from  debt  a  sum  sufficient  to  cover  all  antici- 
pated expenses  for  at  least  one  month,  will  at  the  end  of  each 
quarter,  or  oftener  if  deemed  advisable  by  the  council  and  com- 
manding officer,  be  taken  from  the  cash  on  hand  and  set  aside 
as  a  reserve  fund."     This  fund  is  usually  deposited  in  the  sav- 
ings department  of  a  bank  or  loan  association  where  it  will  net 
the  exchange  a  small  income  and  still  be  available  if  needed. 

Credit  Reserve  Fund  Account  with  all  Net  Profits  until  the 
prescribed  amount  is  reached. 

Debit  Profit  and  Loss  with  all  Net  Profits  declared  to 

the  Reserve  Fund. 

Debit  Reserve  Fund  Account  with  all  amounts  withdrawn 
from  it. 

Credit  Dividends  with  all  amounts  transferred  from 
the  Reserve  Fund  Account. 

92.  RESERVE  DEPOSIT  ACCOUNT.*     This  is  an  asset 
(bills  receivable)   account  that  must  be  opened  to  offset  the 
Reserve  Fund  Account,  which  is  a  liability  account.     If  the 

*This  account  can  be  eliminated  by  debiting  the  reserve  fund  to  Bills  Receivable. 


BOOKKEEPING  59 

Reserve  Fund  were  left  in  the  business,  the  assets  to  offset  this 
fund  would  be  represented  by  cash  on  hand.  The  regulations, 
however,  require  that  the  cash  representing  this  fund  be  set 
aside  where  it  will  be  immediately  available  if  needed.  If  the 
cash  representing  this  fund  be  deposited  in  a  bank,  then  the 
deposit  represents  the  fund,  and  it  should  be  carried  on  the 
account  book  under  some  such  caption  as,  Reserve  Deposit 
Account,  or  under  name  of  bank  in  which  deposited. 

Debit  Reserve  Deposit  Account  with  all  sums  deposited  to 
it. 

Credit    Cash    Account    with    all    cash   deposited    to 

Reserve  Deposit  Account. 

Credit  Reserve  Deposit  Account  with  all  sums  withdrawn 
from  it. 

Debit    Cash   Account    with   all    cash    received    from 
Reserve  Deposit  Account. 

93.  SURPLUS  FUND  ACCOUNT.  This  account  is  a 
liability,  and  is  opened  to  account  for  profits  that  are  not 
declared  to  dividends  but  are  left  in  the  business  to  give  it  a 
larger  working  capital,  in  order  to  carry  a  larger  stock,  to 
discount  accounts  payable,  etc.  Cash  discount  is  the  source  of 
a  considerable  profit  throughout  the  year  and  should  not  be 
passed.  The  size  of  the  Surplus  Fund  will  depend  upon  the 
capitalization  and  amount  of  business  of  the  exchange. 

Credit  Surplus  Fund  Account  with  all  Net  Profits  declared 
to  it  until  it  reaches  its  prescribed  amount. 

Debit  Profit  and  Loss  with  all  Net  Profits  declared  to 

Surplus  Fund. 

Debit  Surplus  Fund  Account  with  all  amounts  declared 
from  it  to  dividends. 

Credit  Dividend  Account  with  all  amounts  declared 

to  dividends  from  the  Surplus  Fund. 

The  advantage  of  having  a  part  of  the  working  capital  repre- 
sented by  a  Surplus  Fund  rather  than  all  by  Capital  Stock  is 
that  the  Surplus  Fund  is  much  more  elastic  than  Capital  Stock, 
and  where  it  is  kept  the  working  capital  can  therefore  be  much 


60  A  MANUAL  FOR  POST  EXCHANGES 

more  easily  expanded  and  contracted  to  meet  the  changing 
volume  of  business  of  an  exchange.  The  business  of  an  ex- 
change is  usually  much  greater  in  summer  than  in  winter. 

94.  SINKING    FUND    ACCOUNT.     Depreciations    de- 
clared to  the  Building  and  Fixture  Account  will  provide  an 
increased  cash  balance  out  of  which  to  purchase  new  buildings 
and  fixtures  to  replace  old,  but  where  additional  buildings  and 
fixtures  are  purchased  to  enlarge  an  exchange,  a  special  fund 
must  be  created  out  of  which  to  buy  them  if  it  is  desired  not  to 
decrease  the  working  capital.     This  may  be  done  in  two  ways. 
Either  an  assessment  of  so  much  a  share  may  be  made  on  the 
members  of  the  exchange,  or  a  certain  percentage  of  the  net 
profit  may  be  declared  to  a  reserve  or  sinking  fund  out  of  which 
to  buy  them. 

This  fund  should  be  kept  separate  from  surplus  and  reserve 
funds  which  have  been  created  to  give  the  business  a  larger 
working  capital,  for  the  reason  that  as  soon  as  the  increased 
fixtures  are  purchased,  the  capital  stock  is  increased  in  value 
a  like  amount. 

Credit  Sinking  Fund  Accownt  with  all  Net  Profits  declared 
to  it. 

Debit  Profit  and  Loss  Account  with  all  Net  Profit 

declared  to  Sinking  Fund  Account. 

Debit  Sinking  Fund  Account  with  all  purchases*  of  addi- 
tional buildings  and  fixtures. 

Credit  Capital  Stock  Account  with  all  purchases^  of 

additional  buildings  and  fixtures. 

Where  the  funds  are  created  by  an  assessment  on  the  Capital 
Stock,  the  Cash  Account  is  debited  and  the  Capital  Stock 
Account  credited  with  the  assessments  at  once,  no  sinking  fund 
being  provided. 

95.  RECREATION   AND   AMUSEMENT   FUND   AC- 
COUNT.    "Such  sum  (of  the  Net  Profits)  as  the  council  shall 

*The  Cash  Account  must  also  be  credited  and  the  Building  and  Fixtures  Account 
also  debited  with  all  purchases  for  buildings  and  fixtures,  whether  they  are  additional 
or  merely  to  replace  old. 

tAny  expenditures  for  propetry  must  also  be  credited  to  Capital  Stock  and  debited 
to  Buildings  and  Fixtures. 


BOOKKEEPING  61 

recommend  and  the  commanding  officer  shall  approve,  will  be 
set  aside  for  the  benefit  of  the  entire  garrison,  to  be  disbursed 
by  the  post  exchange  officer  on  written  recommendation  of  the 
chaplain  approved  by  the  post  or  regimental  commander  for 
the  recreation  and  amusement  of  the  enlisted  men  of  the  com- 
mand. Any  property  purchased  with  funds  so  derived  shall 
pertain  to  such  post  exchange  as  part  of  its  fixtures.  At  posts 
other  than  chaplain  posts  this  fund  for  the  recreation  and 
amusement  of  the  enlisted  men  will  be  disbursed  by  the  post 
exchange  officer  on  the  requisition  of  any  officer  detailed  in 
charge  of  such  recreation  and  amusement  and  approved  by  the 
commanding  officer.'"  Par.  41,  b. 

Credit  Recreation  and  Amusement  Fund  Account  with  all 
Net  Profits  declared  to  it. 

Debit  Profit  and  Loss  with  all  Net  Profits  declared 

to  the  Recreation  and  Amusement  Fund. 
Debit  Recreation  and  Amusement  Fund  Account  with  all 
expenditures^  for  recreation  and  amusement  as  enumer- 
ated above. 

Credit    Cash    Account    with    all    expenditures^    for 
recreations  and  amusements  as  enumerated  above. 

96.  BENEFIT  OF  ENTIRE  GARRISON  FUND  AC- 
COUNT. "Such  sum  (of  the  Net  Profits)  as  the  council,  with 
the  approval  of  the  commanding  officer  may  determine  will  be 
appropriated  for  the  benefit  of  the  entire  garrison  to  all  or  any 
of  the  following  purposes:  Laying  out  and  preparing  and 
cultivating  gardens  and  supplying  seeds,  roots,  or  plants  for 
the  same;  the  purchase  of  books,  newspapers,  periodicals,  sta- 
tionery, etc.,  for  the  post  exchange  or  post  library;  the  pur- 
chase of  gymnastic  appliances  when  there  is  no  gymnasium 
connected  with  the  exchange;  prizes  for  athletic  sports.  The 
expenditure  of  profits  for  purchases  other  than  these  requires 
the  approval  of  the  division  commander." 

Credit  Benefit  of  Entire  Garrison  Fund  Account  with  all 
Net  Profits  declared  to  it. 

Debit  Profit  and  Loss  with  all  Net  Profits  declared  to 
the  Benefit  of  the  Entire  Garrison  Fund. 


62  A  MANUAL  FOR  POST  EXCHANGES 

Debit  Benefit  of  Entire  Garrison  Fund  Account  with  all 
expenditures  for  benefit  of  the  entire  garrison  as  enumer- 
ated above. 

Credit  Cash  Account  with  all  expenditures  for  bene- 
fit of  the  entire  garrison  as  enumerated  above. 

97.  INSURANCE  ACCOUNT.     This  is  an  asset  account 
carried  in  the  Ledger  to  show  the  unexpired  value  of  insurance 
premiums.     The  premium  on  fire  insurance  is  paid  in  advance 
and   covers   from   three   to   five   years.      The   expenditure   for 
premium  should  not  all  be  debited  to  expense  at  once,  for  or- 
ganizations now  in  the  exchange  may  leave  in  a  short  time  and 
new  ones   take   their  places,   and   should  -all   the  premium  be 
charged  to  expense  at  once  the  old  organization  will  have  paid 
out  of  their  earnings  for  insurance  that  will  protect  only  the 
property  of  the  new  organizations. 

Debit  Insurance  Account  with  all  expenditures  for  insur- 
ance. 

Credit  Cash  Account  with  all  expenditures  for  in- 
surance. 

Credit  Insurance  Account  each  month  or  quarter  with  the 
expired  values  of  insurance  premiums. 

Debit  Operating  Expense  Account  each  month  or 
quarter  with  the  expired  values  of  insurance  pre- 
miums. 

98.  DISCOUNT  ACCOUNT.     This  is  a  revenue  account 
to  which  are  credited  all  discounts  received  by  paying  accounts 
payable  within  a  specified  time,  usually  10  days  from  date  of 
invoice. 

Credit  Discount  Account  with  all  discounts  received. 

Debit  Accounts  Payable  with  all  discounts  received. 

99.  REVENUE    ACCOUNT.     To    this    account    are 
credited  all  revenues  received,  other  than  discounts,  such  as, 
interest  from  Reserve  Fund,  commission  from  exchange  barber, 
tailor,  etc.,  if  they  work  on  commission.     Such  revenues  will 
usually  be  in  cash  receipts. 


BOOKKEEPING  63 

Credit  Revenue  Account  with  all  revenues  received  other 
than  discounts. 

Debit  Cash  Account  with  all  (cash)  revenues  received. 

100.  OPERATING   EXPENSE   ACCOUNT.*     To   this 
account  are  debited  only  the  expenditures  enumerated  below. 

Debit  Operating  Expense  Account  with  all  expenditures 
for  the  following: 

(a)  Compensation  of  attendants. 

(b)  Insurance  on  merchandise,  furniture,  fixtures,  and 
building,  if  the  property  of  the  exchange. 

(c)  The  cost  of  books,  blanks  and  stationery  (for  the 
exchange)  ;    necessary    policing    about    the    quarters 
when  not  performed  by  the  regular  attendants ;  ex- 
press and  freight  charges  on  articles  that  are  neither 
merchandise  nor  permanent  fixtures. 

Credit  Cash  Account  with  all  cash  expenditures  made  for 
any  of  the  above  enumerated  purposes. 

101.  BUILDING    AND    FIXTURES    EXPENSE    AC- 
COUNT.    To   this  account  are  debited  all  expenditures   for 
repairs,  painting,  etc.,  of  and  depreciations  in  buildings  and 
fixtures.     This  account  may  also  be  called  the  "Maintenance 
of  Buildings  and  Fixtures  Account." 

Debit  Building  and  Fixtures  Expense  Account  with  all 
expenditures  for  repairs,  painting,  etc.,  of  buildings  and 
fixtures,  and  with  all  depreciations  in  buildings  and  fix- 
tures. 

Credit  Cash  Account  with  all  cash  expenditure  for 

such  purposes. 

Credit  Building  and  Fixtures  Account  with  all  depre- 
ciations in  building  and  fixtures. 

Most  business  houses  do  not  provide  a  Depreciation  Fund, 
but  debit  Profit  and  Loss,  and  credit  Building  and  Fixtures 
Account  for  the  same  after  having  taken  the  trial  balance,  as 
shown  in  par.  274.  By  either  method  the  results  are  the  same, 
i.  e.,  by  taking  the  amount  of  depreciation  out  of  the  profits, 

*  See  footnote  page  22. 


64  A  MANUAL  FOR  POST  EXCHANGES 

the  cash  balance  is  increased  the  same  amount  as  the  value  of 
building  and  fixtures  is  decreased.  From  this  greater  amount 
of  cash  on  hand  new  buildings  and  fixtures  can  be  bought  to 
replace  old. 

102.  GENERAL    REMARKS    ON    ACCOUNTS.     The 
debit  and  credit  references  to. the  same  transactions  in  the  above 
accounts   are  reciprocal.      For  example,  under  Purchase  Ac- 
count it  is  specified: 

"Debit  Purchase  Account  with  all  purchases  of  merchan- 
dise." 

"Credit  Accounts  Payable  with  all  credit  purchases." 
While  under  Accounts  Payable: 

"Credit  Accounts  Payable  with  the  total  value  of  each  bill 
of  merchandise  purchased." 

"Debit  Purchase  Account  with  the  total  value  of  each 

bill  of  merchandise  purchased." 

The  same  commercial  transaction  is  referred  to  in  both  cases ; 
i.  e.,  the  purchase  of  merchandise.  The  Purchase  Account  is 
debited  only  once  and  the  Accounts  Payable  credited  only  once 
for  the  same  transaction. 

Sometimes  all  the  credit  or  debit  entries  of  one  class  of  com- 
mercial transactions  for  the  month  are  thus  combined  in  one 
credit  or  debit  entry ;  or,  on  the  other  hand,  the  credit  or  debit 
entry  of  some  transaction  is  split  into  two  or  more  credit  or 
debit  entries  going  to  two  or  more  different  accounts.  Thus 
when  an  account  payable  is  discounted,  the  credit  entries  which 
balance  the  one  debit  entry  to  Accounts  Payable  are  repre- 
sented by  one  credit  entry  to  the  Cash  Account  and  another 
credit  entry  to  Discounts  Account. 

The  above  modifications  of  entries  should  not  confuse  the 
mind  of  the  reader. 

Where  reserve  funds  are  created  out  of  profits  for  certain 
/expenditures,  such  expenditures  must  not  be  debited  to  any 
expense  account. 

103.  THE  TRIAL  BALANCE.     As  will  be  gathered  from 
the   immediately   preceding   paragraphs    on   double   entry   ac- 
vcounting,  and  as  stated  before,  every  transaction  has  a  debit 


BOOKKEEPING  65 

and  a  credit  entry,  which  entries  are  always  in  different  ac- 
counts. Therefore,  the  total  debit  entries  to  all  accounts 
should  equal  the  total  credit  entries  to  all  accounts,  or  stated 
in  another  way,  the  total  of  all  debit  balances  should  equal  the 
total  of  all  credit  balances.  Arranging  the  accounts  having 
debit  balances  to  the  left  and  those  having  credit  balances  to 
the  right,  the  accounts  are  as  follows: 
Cash  Account  Capital  Stock  Account 

Building  and  Fixtures  Coupon  Account 

Merchandise  on  hand  (Vi)  Accounts  Payable 

Purchase  Account  Sales  Account 

Accounts  Receivable  Bills  Payable 

Bills  Receivable  Dividends  Unpaid 

Reserve  Deposit  Account  Reserve  Fund  Account 

Operating  Expense  Surplus  Fund  Account 

Bldg.  and  Fixtures  Expense         Recreation  and  Amusement 
Insurance  Account  Fund 

Benefit  of  Entire  Garrison 

Fund 

Sinking  Fund  Account 
Discount  Account 
Revenue  Account 


When  the  balances  of  the  several  accounts  are  so  arranged, 
they  form  what  is  known  as  the  Trial  Balance.  If  all  entries 
have  been  posted  and  posted  properly,  the  Trial  Balance  will 
balance.  If  it  does  not  balance  some  error  has  been  made  and 
the  accounts  and  the  entries  must  be  examined  to  locate  such 
error.  When  the  accounts  balance  as  shown  by  the  Trial 
Balance,  the  bookkeeper  can  then  determine  the  gross  and  net 
profits  of  the  business  as  explained  in  the  two  succeeding  para- 
graphs. 

Aids  for  detecting  errors  in  trial  balances  are  given  in  par, 
258-260. 

104.  THE  TRADING  ACCOUNT.  This  is  a  controlling- 
account  of  all  merchandise  accounts,  and  whose  balance  repre- 
sents the  gross  profit  of  the  business  on  the  merchandise  or/ 


66  A  MANUAL  FOR  POST  EXCHANGES 

commodities  for  sale.  This  account  appears  in  financial  state- 
ments—monthly,  quarterly,  or  annual — of  corporations,  etc., 
immediately  after  the  Trial  Balance. 

Debit  Trading  Account  with : 

(1)  Merchandise  on  hand  at  beginning  of  month. 

(2)  Purchase  Account. 

Credit  Trading  Account  with: 

(1)  Sales  Account. 

(2)  Merchandise  on  hand  at  end  of  month. 

The  credit  balance  represents  the  Gross  Profit  of  the  busi- 
ness ;  or,  should  there  be  a  debit  balance,  the  Loss. 

The  Trading  Account  is  represented  as  follows : 
Merchandise  on  hand  (Vi)  Sales  Account 

Purchase  Account  Merchandise  on  hand  (Ysi) 

Gross  Profit 


105.  PROFIT  AND  LOSS  ACCOUNT.  The  gross  profit 
of  a  business,  plus  discounts  and  revenues  received,  minus  ex- 
penses, etc.,  equals  the  net  profit  should  the  former  be  the 
greater;  if  not,  the  net  loss. 

The  Profit  and  Loss  Account  is  represented  as  follows: 
Operating  Expense  Gross  Profit 

Bldg.  and  Fixtures  Expense         Discount  Account 
Net  Profit  Revenue  Account 


106.  BALANCE  SHEET.  It  is  very  necessary  that  a 
tabulated  statement  be  made  out  showing  the  liabilities,  and  how 
and  in  what  form  they  are  represented  by  assets.  This  state- 
ment is  made  by  taking  the  assets  and  liabilities  balances  out 
of  the  Trial  Balance,  putting  the  former  in  the  debit  column, 
and  the  latter  in  the  credit  column  of  the  statement.  This 
statement  is  called  the  Balance  Sheet.  The  Balance  Sheet  of 
the  post  exchange  is  represented  as  follows : 


BOOKKEEPING 


67 


Cash  Account 
Buildings  and  Fixtures 
Accounts  Receivable 
Bills  Receivable   (Enlisted 

men) 

Bills  Receivable  (Notes) 
Reserve  Deposit  Account 
Insurance  Account 


Total  Assets 
Capital  Stock 
Coupon  Account 
Accounts  Payable 
Bills  Payable 
Dividends  Unpaid 
Reserve  Fund  Account 
Surplus  Fund  Account 
Recreation  and  Amusement 

Fund 
Benefit  of  Entire  Garrison 

Fund 

Sinking  Fund  Account 
Net  Profit 


Total  Assets  Total  Liabilities 

107.  BALANCING  ACCOUNTS.  The  balance  is  that 
amount  which  must  be  added  to  the  lesser  of  the  two  sides  of  an 
account  to  make  it  equal  to  the  greater  side.  It  is  entered  on 
the  lesser  side  in  red  ink.  Should  the  balance  represent  the 
value  of  property,  it  is  carried  down  to  the  opposite  side  of  the 
account  for  the  ensuing  fiscal  period;  should  it  represent  a 
profit  or  a  loss  to  the  business,  it  is  not  so  carried  down,  but 
carried  forward  to  the  profit  and  loss  account.  The  following 
illustration  shows  an  account  balanced. 

INSURANCE 


Jul. 

1 

Aetna,  3  yrs 

36 

00 

Dee. 

31 

8y  Profit  &  Lo 

53 

6 

00 

- 

31 

By  Balance 

30 

00 

_36 

00 

_36_ 

00 

Jan. 

1 

To  Balance 

30 

00 

A  single  line  drawn  across  a  money  column  is  the  sign  of  addi- 
tion, the  sum  of  the  numbers  above  the  line  being  the  number 
entered  immediately  below  the  single  line.  A  double  line  signi- 
fies that  the  account  has  been  balanced,  and  that  all  numbers 
above  the  double  lines  are  to  be  ignored  in  the  ensuing  fiscal 
period.  These  lines  are  drawn  in  red  ink. 


68  A  MANUAL,  FOR  POST  EXCHANGES 

Closing  lines  are  usually  not  drawn  for  personal  accounts  on 
account  of  the  large  number  of  them.  The  balance  of  these 
accounts,  however,  are  usually  determined  at  the  end  of  each 
month  for  the  purpose  of  rendering  statements.  When  a  per- 
sonal account  is  paid  in  full,  a  single  line  is  usually  drawn  clear 
across  the  page  immediately  below  the  last  entry.  The  draw- 
ing of  double  lines  for  all  accounts  is  now  often  dispensed  with 
on  account  of  the  great  amount  of  time  thereby  consumed,  the 
separation  of  fiscal  periods  being  accomplished  by  leaving  two 
or  three  blank  lines.  The  accounts  in  the  specimen  pages, 
Chapter  III,  have  the  double  lines  omitted. 


CHAPTER  III 

MODEL  SET  OF  DOUBLE  ENTRY  ACCOUNTING 
FOR  POST  EXCHANGES 

108.  Fort  Reynolds,  Texas,  is  garrisoned  by  the  Head- 
quarters and  First  Battalion,  40th  Infantry,  Troop  "A,"  20th 
Cavalry,  and  a  sanitary  detachment  of  16  enlisted  men.  On 
August  1,  1915,  a  post  exchange  was  established;  1st  Lieut. 
G.  Boyd,  40th  Infantry  was  appointed  post  exchange  officer; 
and  a  building  was  set  aside  by  the  commanding  officer  as  an 
exchange  building.  In  the  establishment  of  the  post  exchange, 
the  exchange  council  has  complied  with  all  post  exchange  regu- 
lations— the  value  of  each  share  of  capital  stock  has  been 
placed  at  $5.00 ;  articles  for  sale  and  the  selling  price  for  the 
same  have  been  determined;  schedules  of  charges  for  post  bar- 
ber and  laundryman  have  been  published;  etc.  All  purchases 
given  below  have  been  authorized. 


Transactions : 
109.     August  15,  1915. 


Accounting  Disposition : 


From    Hdqrs.    Co.    for    Capital    f C«**  Capital  Stock, 


Stock — $290.00   in   cash: 


From  M.  G.  Co.,  for  Capital 
Stock — $100  in  cash  and 
$45.00  in  note: 

From  Sanitary   Detachment  for 

Capital     Stock — note     for 

$80.00: 
From  Co.  "A"  for  Capital  Stock 

— $325.00  in  cash: 
From  Co.  "B"  for  Capital  Stock 

— $325.00  in  cash: 
From  Co.  "C"  for  Capital  Stock 

— $325.00  in  cash: 
From  Co.  "D"  for  Capital  Stock 

— $325.00  in  cash: 
From    Troop    "A"    for    Capital 

Stock — $300.00    in    cash    and 

note  of  $50.00: 


\      $290.00    (170) 

[Debit  Cash  $290.00 (124) 

Cr.  Capital  Stock,  $145.00 

(170) 

f   Dr.  Cash,  $100.00 (124) 

Dr.  Bills  Receivable, 

$45.00    (167) 


74 


A  MANUAL  FOR  POST  EXCHANGES 


110.  August  20,  1915. 

Coupon  issue  on  notes  given  by 
enlisted  men, — Hdqrs.  Co., 
$10;  M.  G.  Co.,  $6;  San. 
Det.  $3;  Co.  A,  $12;  Co.  B, 
$13;  Co.  C,  $11;  Co.  D,  $14; 
Troop  A,  $15: 

Cash  Sales — $10.00: 

Coupon  Sales— $75.00: 

Credit  Sales— Hdqrs.    Co.   $10; 

M.  G.  Co.,  $4 ;  San.  Det.  $2 ; 

Lt.   Smith,  $5;   Capt.   Moore, 

$2.50: 
Sergt.   Hill  detailed  as  steward 

extra  pay  $50  per  mo.;  Pvts. 

Orr,  Davis,  and  Bell  detailed 

as  attendants,  extra  pay  $15 

per  mo. 

Received  from  A.  B.  White  Co., 
Mdse.,  billed  at  $150,  2%  10 
days.  Paid  $1.10  for  freight: 

111.  August  21,  1915. 

Coupon  Issue — Hdqrs.  Co.,  $8; 
M.  G.  Co.,  $5;  S.  D.,  $4;  Co. 
A,  $13;  Co.  B,  $11;  Co.  C, 
$14;  Co.  D,  $10;  Troop  A, 
$14: 

Received  from  Office  Supply  Co., 
Typewriter,  $80;  Safe,  $40; 
Office  Desk,  $25;  Office  Cab- 
inet, $50;  Adding  Machine, 
$200;  net: 

Received  from  Cash  Register 
Co.,  two  cash  registers,  $140 
net: 

Received  from  Store  Supply  Co., 
Show  Cases,  $100;  and  Soda 
Fountain,  $120;  net: 


Cr.  Coupon  Account, 

$84.00    .: (123) 

Dr.  Bills  Receivable  (En- 
listed men)  at  end  of 
month (159  to  166) 

:Cr.  Sales  Account,  $10.00  (122) 
Dr.  Cash,  $10.00 (124) 

Cr.  Sales  Account,  $75.00  (122) 
Dr.    Coupon   Account, 

$75.00    (123) 

Cr.  Sales  Account,  $23.50  (122) 
Dr.    Accounts    Receivable, 

$23.50   ..(135-137,  143,  144) 


Cr.  Accounts  Payable, 

$150.00    (128) 

Cr.  Cash,  $1.10 (125) 

Dr.  Purchase  Account, 

$151.10    (121) 


Cr.  Cash,  $395.00 (125) 

Dr.  Buildings  and  Fixtures, 
$395.00   (175) 


MODEL  SET  OF  DOUBLE  ENTRY  ACCOUNTING 


75 


Received  from  C.  D.  Brown  Co., 

Mdse.  billed  at  $200,  3%   10 

days;  freight  $1.59: 
Cash  Sales— $12.52: 
Coupon  Sales— $72.00: 
Credit   Sales— Co.   A,   $12;   Co. 

C,    $13;     Co.     D,    $12;     Lt. 

Jones,  $3;   Lt.   Davis,  $4.50; 

Capt.  Haines,  $2.15: 

Paid  S.  P.  Ry.,  $13.78  for 
freight  on  fixtures: 

Paid  A.  B.  Painter,  $10.00  for 
painting  interior  of  exchange 
building: 

112.     August  22,  1915. 

Coupon  Issue:   Hdqrs.   Co.,  $8; 

M.  G.  Co.,  $4;  S.  D.,  $3;  Co. 

A,  $14;   Co.   B,  $13;   Co.   C, 

$13;   Co.   D,   $12;   Troop   A, 

$14: 

Cash  Sales,  $13.10: 
Coupon  Sales,  $71.00 
Credit  Sales:  Co.  D,  $13;  Troop 

A,    $15;    Lt.    Boyd,    $2;    Lt. 

Bracken,    $1.50;    Lt.    Bryant, 

90c;  Lt.  Britt,  $3;  Lt.  Page, 

75c: 

Received  from  Empire  Theater 
1,000  tickets,  billed  at  $75, 
and  to  be  sold  at  10c  each: 


Cr.  Cash,  $13.78 (125) 

Dr.   Operating  Expenses, 

$13.78    (182) 

,Cr.    Cash,    $10.00 (125) 

Dr.  Bldgs.  and  Fixtures, 
Expense  Account  $10.00  (183) 


'Cr.  Accounts  Payable, 

$75.00    (130) 

Dr.  Purchase  Account, 

$75.00    (121) 


113.     August  23,  1915. 
Coupon  Issue:    Hdqrs.  Co.,  $9; 
M.  G.  Co.,  $6;  S.  D.,  $3;  Co. 
A,  $14;   Co.   B,   $12;   Co.   C, 
$14;    Co.    D,   $12;   Troop   A, 


Cash  Sales,  $12.75: 
Coupon  Sales,  $76.00: 
Credit    Sales:     Hdqrs.    Co.    $9: 
M.   G.    Co.,   $2;    Capt.    Bow 


76 


A  MANUAL  FOR  POST  EXCHANGES 


man,,  $2.10;  Maj.  Brand, 
$1.50;  Lt.  Bracken,  $1.20; 
Muir,  50c;  Lt.  Col.  Morton 
iOc: 

Received  from  E.  F.  Green  Co., 
Mdse.  billed  at  $125.00,  3% 
10  days;  freight,  95c: 

114.  August  24,  1915. 
Coupon  Issue:  Hdqrs.  Co.,  $10; 

M.  G.  Co.,  $5 ;  S.  D.,  $2 ;  Co. 

A,  $13;   Co.   B,   $14;   Co.   C, 

$12;  Co.  D,  $13;  Co.  A,  $15. 
Cash  Sales,  $18.00: 
Coupon  Sales,  $80.00: 
Credit  Sales:  Co.  A,  $11 ;  Co.  B, 

$10;  Co.  C,  $14;  Capt.  Moore, 

$1;     Lt.     Bryant,     25c;     Col. 

Brooke,  95c;  Lt.  Odell,  $1: 
Received  from  G.  H.  May  Co., 

Mdse.  billed  at  $135.00,  3% 

10  days,  freight,  67 c: 

Returned  to  E.  F.  Green  Co.,  5 
doz.  cans  spoiled  tomatoes, 
listed  at  7%c  per  can: 

115.  August  25,  1915. 
Coupon  Issue:   Hdqrs.  Co.,  $10; 

M.  G.  Co.,  $5;  S.  D.,  $3;  Co. 

A,  $13;   Co.   B,  $13;   Co.   C, 

$12;   Co.   D,   $13;   Troop   A, 

$15: 

Cash  Sales,  $11.48: 
Coupon  Sales,  $69.00: 
Credit  Sales:  Co.  D,  $12;  Troop 

A,    $14;    Lt.    Smith,    $1;    Lt. 

Jones,     50c;   ^apt.     Haines. 

$1.50;  Lt.  Britt,  $1.50;  Capt. 

Lt.  Col.  Morton,  $2: 

116.  August  26,  1915. 
Coupon  Issue:    Hdqrs.  Co.,  $9; 

M.  G.  Co.,  $4;  S.  D.,  $4;  Co. 
A,  $12;   Co.   B,  $11;   Co.   C, 


'Cr.   Purchase  Account, 

$4.50    (121) 

Dr.  Accounts  Payable, 

$4.50   (131) 


MODEL  SET  OF  DOUBLE  ENTRY  ACCOUNTING  77 

$10;   Co,  D,   $11;   Troop   A, 


Cash  Sales,  $13.27: 

Coupon  Sales,  $65.00: 

Credit    Sales:    Hdqrs.    Co.,    $9; 

M.  G.  Co.,  $4 ;  S.  D.,  $2 ;  Lt. 

Davis,    25c;    Lt.    Boyd,    65c; 

Maj.  Brand,  $2;  Capt.  Muir, 

$1.15;  Lt.  Page,  75c: 
Received    from    Mdse.    Supply 

Co.,  Mdse.  billed  at  $150,  3% 

10  days;  freight,  $1.16: 

117.  August  27,  1915. 
Coupon  Issue:  Hdqrs.  Co.,  $10; 

M.  G.  Co.,  $4;  S.  D.,  $2;  Co. 
A,  $13;  Co.  B,  $14;  Co.  C, 
$11;  Co.  D,  $11;  Troop  A, 
$16: 

Cash  Sales,  $12.17: 

Coupon  Sales,  $73.75: 

Credit  Sales:  Co.  A,  $12;  Co.  B, 
$12;  Co.  C,  $11;  Capt.  Bow- 
man, $1 ;  Lt.  Boyd,  $1.15;  Lt. 
Britt,  $1;  Col.  Brooke,  $1.10; 
Lt.  Odell,  $1.05: 

Received  from  C.  D.  Brown  Co., 
Mdse.  billed  at  $180,  3%  10 
days;  freight,  $1.27: 

118.  August  28, 1915. 
Coupon  Issue:  Hdqrs.  Co.,  $10; 

M.  G.  Co.,  $3 ;  S.  D.,  $2 ;  Co. 

A,  $12;   Co.   B,  $11;   Co.   C, 

$13;    Co.    D,  $12;   Troop   A, 

$16: 

Cash  Sales,  $10.71: 
Coupon  Sales,  $70.25: 
Credit  Sales:  Co.  D,  $10;  Troop 

A,  $14;   Capt.   Moore,  $2.25; 

Lt.  Bryant,  $2 ;  Lt.  Page,  65c ; 

Lt.  Col.  Morton  $1 : 
Received  from  A.  B.  White  Co.. 

Mdse.  billed  at  $100,  2%    10 

days ;  freight,  72c : 


78 


A  MANUAL  FOR  POST  EXCHANGES 


119.     August  29,  1915. 
Coupon  Issue:   Hdqrs.   Co.,  $9; 
M.  G.  Co.,  $4;  S.  D.,  $3;  Co. 
A,  $12;   Co.   B,  $12;   Co.   C, 
$11;   Co.   D,  $11;   Troop  A, 


Cash  Sales,  $12.82: 

Coupon  Sales,  $71.65: 

Credit    Sales:    Hdqrs.    Co.,    $8; 

M.  G.  Co.,  $5;  S.  D.,  $1;  Lt. 

Jones,   $1.25;     Capt.   Haines, 

$1.20;    Lt.     Bracken,    $1.30; 

Maj.  Brand,  $1;    Capt.  Muir, 

35c. 
Received  from  O.  K.  Moore  Co., 

Mdse.  billed  at  $205,  less  3% 

10  days;  freight,  88c: 

120.     August  30,  1915. 
Coupon  Issue:  Hdqrs.   Co.,  $8; 
M.  G.  Co.,  $3 ;  S.  D.,  $3 ;  Co.  A, 

$10;  Co.  B,  $9;  Co.  C,  $8;  Co. 

D,  $14;  Troop  A,  $16: 
Cash   Sales,  $17.09: 
Coupon  Sales,  $78.15: 
Credit  Sales:  Co.  A,  $13;  Co.  B, 

$11;  Co.  C,  $13;  Co.  D,  $11; 

Troop    A,    $13;    Lt.     Davis, 

$1.75;  Lt.  Smith,  $1.10;  Capt. 

Bowman,     75c;      Lt.      Odell, 

$1.25;  Lt.  Page,  40c: 

Paid  A.  B.  White  Co.,  $150  less 
2%,  bill  dated  Aug.  20,  1915: 

Paid  C.  D.  Brown  Co.,  $200  less 
3%,  bill  dated  Aug.  21,  1915: 


|  Cr.  Cash,  $147.00  . 
I   Cr.  Discount,  $3.00 
Dr.  Accounts  Payable, 
$150.00    


..(125) 
.  .(180) 


(128) 


St 
Steward, 


for 


August  31,  1915 
v     .  \  Cr.  Cash,  $16.67   .......  (125) 

Exchange      Dr   Operating  Expense, 

|lfljg         *        P        >     (18g) 


services: 


MODEL  SET  OF  DOUBLE  ENTRY  ACCOUNTING     79 

Paid  Pvts.  Orr,  Davis,  and  Bell, 
$5.00  each;  services  as  atten- 
dants : 

The  Exchange  was  closed  this  date  and  an  inventory  of 
merchandise  and  fixtures  was  taken.  Value  of  Merchandise, 
$293.71;  of  fixtures,  $755.00.  Post  Exchange  Council  met 
at  1:00 'P.  M.  ;  Net  Profit  was  transferred  to  Reserve  (See 
Par.  40).  Troop  A  was  transferred  from  Post  this  date. 


JOURNAL 

p. 

Dr. 

Cr. 

120 

V* 

Aog.  15,  1915. 

Poet  Exchange,  Port  Reynolde.  Texas,  organized  this  date. 

Capital  Stock.  $5.00  per  share.  Membership  and  inveetmenta  aa 

follows: 

124 

Caeb  Account              Edcrs.  Co..  40th  Infantry. 

290 

00 

170 

Capital  Stock           58  shares. 

.290 

00 

124 

Cash  Account              U.  0.  Co.,  40th  Infantry. 

100 

00 

167 

Bills  Receivable           29  shares. 

45 

00 

170 

Capital  Stock 

Ml 

00 

168 

Bills  Receivable           Sanitary  Detachment,  Port 

SO 

00 

170 

Capital  Stock           Reynolds,  16  shares. 

60 

00 

124 

Cash  Account              Co.  A,  40th  Infantry', 

326 

00 

170 

Capital  Stock           65  shares. 

326 

00 

124 

Cash  Account              Co.  B,  40th  Infantry, 

325 

00 

170 

Capital  Stock          65  shares. 

325 

00 

124 

Cash  Account              Co.  C,  40th  Infantry, 

32S 

00 

170 

Capital  Stock          65  shares. 

325 

00 

124 

Cash  Account               Co.  D,  40th  Infantry, 

325 

00 

170 

Capital  Stock           65  shares. 

325 

00 

124 

Cash  Account               Troop  A,  20th  Cavalry, 

300 

00 

169 

Bills  Receivable           70  shares. 

50 

00 

170 

Capital  Stock 

• 

360 

00 

Aug.  24,  1915. 

131 

£.  P.  Green  Co.,           5  Cox.  cans  spoiled  tomatoes 

4 

50 

121 

Purchase  Account        returned;  C.P.  T£  #  can. 

4 

fiQ 

- 

2169 

50 

2169 

50 

121 

PURCHASE  BOOK 

1915 

^. 

Invoice. 

Freight. 

Ke  turns. 

Aug. 

20 

A.  B.  White  Co.                     lay.  8/20;  25?  10  days. 

128 

150 

00 

1 

10 

21 

C.  D.  Brown  Co.                    Inr.  6/21;  S$,  10  days. 

129 

200 

00 

1 

59 

22 

Entire  Theater                      Inr.  8/22;  net  30  days. 

130 

75 

00 

23 

E.  F.  Green  Co.                     Inr.   8/23;  3£  10  days. 

131 

125 

00 

95; 

24 

G.  H.  May  Co.                         Inv.   8/24;  3%  10  days. 

132 

135 

00 

67 

26 

itdae.  Supply  Co.                   In?.   8/26;  2%  10  days. 

133 

150 

00 

1 

16 

27 

C.  D.   Brcnra  Co.                     lav.  8/27;  Z%  10  days. 

129 

180 

00 

i 

27 

26 

A.  B.  White  Co.                     IDT.  8/28;   2%  10  days. 

128 

100 

00 

72 

?* 

0.  K.  Moore  Co.                    In*.  8/29;  2%  10  days. 

1."H 

205 

w 

flfl 

1320 

00 

1 

iH 

1328 

34 

24 

£.  F.  Green  Co.                     Merchandise  ra  turned 

120* 

4 

60 

Dr.  Trading  Account 

1323 

H 

1The  following  abbreviations  are  used,  L,  Ledger;  P.  B.,  Purchase  Book;  S.  B. 
Sales  Book;  C.  B.,  Cash  Book;  I.  B.,  Inventory  Book,  etc.,  F,  folio  or  page — a: 
used  will  refer  to  paragraph  number. 


122 

SALES  BOOK 

1915 

Cash 
Sales 

Coupon 

Sales 

Credit 

Sales 

Aug. 

20 

Sales 

10 

0 

76 

00 

23 

0 

21 

• 

12 

2 

72 

00 

46 

5 

22 

* 

13 

0 

71 

00 

36 

5 

23 

• 

12 

6 

76 

00 

20 

0 

24 

• 

18 

0 

80 

00 

38 

0 

25 

• 

11 

48 

69 

00 

32 

20 

26 

* 

13 

7 

66 

00 

19 

0 

27 

• 

12 

7 

73 

75 

40 

30 

28 

• 

10 

1 

70 

25 

29 

90 

29 

» 

12 

62 

71 

65 

19 

10 

30 

• 

17 

09 

78 

15 

42 

25 

i 

Cash  Account  D«bit*d 

143 

91 

• 

Dr.  Coupon  Account 

801 

80 

• 

Accounts  R«oeiTabl«  Debited 

348 

05 

* 

Cr.  Trading  Account 

1293 

76 

aCash   account   was  debited   each  day. 

2At  the  end   of   the   month. 

8Each   Account   Receivable   was   debited   for   each    bill. 


123           COUPON  ISSUE  BOOK 

1915 

Ck 

F. 

L.  159 

Hdq.  Co. 

L.  160 
U.  G.  Co 

L.  161 
S.  D. 

L.  162 
Co.  A 

L.  163 
Co.  B 

L.  164 
Co.  C 

L.  165 
Co.  D 

L.  166 
Tp.  A 

Total 

Au«. 

20 

/ 

10 

00 

6 

00 

3 

00 

12 

00 

13 

00 

11 

00 

14 

00 

15 

00 

84 

00 

21 

/ 

8 

00 

6 

00 

4 

00 

13 

00 

11 

00 

14 

00 

10 

00 

14 

DO 

79 

00 

22 

/ 

8 

00 

4 

00 

4 

00 

14 

00 

12 

00 

13 

00 

12 

00 

14 

DO 

81 

DO 

23 

/ 

9 

00 

6 

00 

3 

00 

14 

00 

13 

00 

14 

00 

12 

00 

16 

00 

87 

)0 

24 

• 

.10 

00 

6 

00 

2 

00 

13 

00 

14 

00 

12 

00 

13 

00 

15 

00 

84 

)0 

25 

/ 

10 

00 

6 

00 

3 

00 

13 

00 

13 

00 

12 

00 

13 

00 

15 

00 

84 

00 

26 

/ 

9 

00 

4 

00 

3 

00 

12 

00 

11 

00 

10 

00 

11 

00 

14 

00 

74 

00 

27 

/ 

10 

00 

4 

00 

2 

00 

13 

00 

14 

00 

11 

00 

11 

00 

16 

00 

81 

00 

28 

/ 

10 

ocr 

3 

00 

2 

00 

12 

00 

11 

00 

13 

00 

12 

00 

16 

00 

79 

00 

29 

/ 

9 

00 

4 

00 

S 

00 

12 

00 

12 

00 

11 

00 

11 

00 

14 

00 

76 

00 

30 

/ 

8 

on 

3 

nn 

3 

nn 

10 

on 

9 

nn 

8 

00 

14 

00 

16 

00 

71 

00 

Dr. 

11 

g 

Paya 

la 

Ao 

t.1 

101 

00 

49 

00 

32 

00 

138 

00 

133 

00 

129 

00 

133 

00 

165 

00 

Dr.  C 

OUJ 

on 

Aoooi 

tnt 

880 

00 

1On  the  last  day  of  each  month  each  company  is  debited  under  Bills  Receivable 
(Enlisted  Men)  for  the  total  amount  of  credit  extended  to  its  men  and  for  which 
they  have  given  coupon  notes  payable  on  next  pay  day. 


124 

CASH  BOOK 

1915 

p. 

Receipts 

Totals 

Atlg. 

15 

Capital  Stock                                  Edqrs.  Co.  40th  Inf.  58  shares 

170 

290 

00 

15 

"                                         K.  G.  Co.,                "       29         " 

170 

100 

00 

15 

"              "                                         Co.  A,              "         "       65         " 

170 

325 

00 

16 

"  •           "                                         Co.  B,              "         "       66 

170 

325 

00 

15 

Co.  C,                        -       65 

170 

325 

00 

15 

"            "                                     Co.  D,            "        "      66        " 

170 

325 

00 

15 

"            "                                     Troop  A,  20th  Cav.       70 

170 

300 

00 

20 

Sales  Account                                 Cash  sales 

122 

10 

00 

21 

- 

122 

12 

52 

22 

,,                                                      „ 

122 

13 

10 

23 

.,                                                      „ 

122 

12 

75 

24 

rt                   n                                                               n               ft 

122 

18 

00 

25 

„ 

122 

11 

48 

26 

n                   H                                                               *t               n 

122 

13 

27 

27 

n                 n                                                          n              n 

122 

12 

17 

28 

n                 t»                                                          n               n 

122 

10 

71 

29 

- 

122 

12 

82 

• 

30 

HI.                                                                                 MR 

122 

17 

09 

Total  Cash  Receipt* 

2133 

91 

2132 

91 

125 

CASH  BOOK 

1915 

P. 

Spend  l- 
t  tires 

Totals 

Aug. 

20 

Purchase  Account                             S.  P.  Ry.   Prt.  on  lldae. 

121 

1 

10 

21 

Building  and  Fixture*                  Office  fixtures 

175 

395 

00 

21 

"             "           "                           Store           " 

175 

140 

00 

Zl 

..                                                         „ 

175 

220 

00 

Zl 

Purchase  Account                           S.  P.  Ry.  Prt.  on  Mdae. 

121 

1 

59 

Zl 

Operating  Expense  Account          fixtures 

182 

12 

78 

22 

B.  A  P.            "              «                A.   B.  Painter.  Ptg  iaterior 

183 

10 

00 

23 

Purchase  Account                          S.  P.  By.  Frt.  on  Mdee. 

121 

95 

24 

-     -     "       -"      "      • 

121 

67 

26 

" 

121 

1 

16 

27 

"    "    "        "      "      - 

121 

1 

27 

28 

«                       n                                               •nun'      n         n 

121 

72 

29 



121 

33 

30 

A.  B.  White  Co.                            Aeet.  6/20  in  full,  less  2£ 

128 

147 

00 

30 

C.  D.  Brown  Co.                              "        8/21  •      •          "      3$ 

129 

194 

00 

31 

Operating  Expense  Aeeotmt          Sgt.  Bill's  salary  8/20-8/31 

182 

16 

67 

31 

'•.•••                pvt.  Orr'e        "         8/20-8/31 

182 

5 

00 

31 

"              «                  "      Deris'       "         8/20-8/31 

182 

S 

00 

31 

"                                                     "       Bell's       "         8/20-8/31 

182 

5 

00 

Total  Cash  Expenditures 

1159 

79 

Balance  -  Cash  on  Hand  and  in  Bank 

974 

1,2 

213J 

9} 

INVENTORY  BOOK 

Article 

Num- 
ber 

Unit 

Ur.it 
Value 

Total 
Value 

126                                       Inventory  of  Merchandise—  August  31, 

1916 

*                            *                           * 

*                            *                            * 

Total  lldse.   on  hand,  per  inventory 

293 

71 

127                           Inventory  of  Building  and  Fixture*—  August 

31,  19 

16 

Adding  Machine 

1 

ea 

eoo 

00 

Cash  Register 

2 

ea 

70 

00 

140 

00 

Office  Cabinet 

i 

ea 

50 

00 

'Office  Desk 

i 

ea 

25 

00 

Safe 

i 

ea 

40 

00 

Show  Cases 

4 

ea 

25 

00 

100 

00 

Soda  Fountain 

1 

ea 

120 

00 

Typewriter 

1 

ea 

80 

00 

Total  ralue  of  Building  and  Fixtures 

755 

00 

lTo    save    space    items    are    omitted    and    "total"    only    shown.      Items    should    be 
classified   by   departments. 


ACCOUNTS  PAYABLE 

Date 

F. 

Amount 

Date 

P. 

Amount 

128 

A.  B.  Whit*  C 

>.,  : 

10  Con 

mej 

:e  St 

San  Antonio,  Tex. 

Aug 

30 

Cash                                   C.B 

124 

147 

00 

Aug. 

20 

Itdse.                                 P.B 

121 

150 

00 

30 

Discount                           C.L 

180 

3 

00 

28 

Mdse.                                 P.B 

121 

100 

00 

129 

0.  D.  Brown  C< 

-.  s 

6  Hou 

to 

St. 

Si 

n  Antonio,  Tex. 

Aug. 

30 

Cash                                 C.B. 

124 

194 

00 

Aug. 

21 

Mdse.                                   P.B. 

121 

200 

00 

30 

Discount                         G.L. 

ISO 

6 

00 

27 

Mdse.                                   P.B. 

121 

180 

00 

130 

Empire 

The 

tor, 

«y 

oldai 

11: 

e,   Tex. 

Aug. 

22 

Tickets                           P.B. 

121 

75 

00 

131 

E.   P.   Gree 

>  Co 

.   223 

Ma 

i  St 

,   I 

alias,  Tex. 

Aug. 

24 

Mdse.  Returned              P.B 

121 

4 

50 

Aug. 

23 

lldse.                                 P.B. 

121 

125 

00 

132 

0.  H.   May 

3o.  , 

L2S  S< 

ut 

St., 

Ho 

us  ton,   Tex. 

Aug. 

24 

Mdse.                                P.B. 

121 

186 

00 

133 

Merchandise  Suppl 

t  Co 

.   454 

Ka 

ms   A 

ve. 

,  Kansas  City,  Mo. 

Aug. 

26 

Mdse.                                P.B. 

121 

150 

00 

134 

0.   K.  Moore 

!o.  , 

666  Mi 

di 

on  S1 

Chicago,  111. 

Aug. 

29 

Mdae.                                P.B. 

121 

206 

00 

ACCOUNTS  RECEIVABLE 

Date 

F. 

Amount 

Date 

F. 

Amount 

135 

Heac 

quar 

.era  C 

O.  , 

40th 

In 

'antry 

Aug. 

20 

Mdaa. 

10 

00 

23 

• 

9 

00 

26 

i 

9 

00 

29 

• 

8 

00 

36 

00 

136 

Uaoh 

no  ( 

in  Oo 

, 

10th 

[nf 

antry 

Aug. 

20 

Udao. 

4 

00 

23 

• 

3 

00 

28 

• 

4 

00 

29 

• 

6 

00 

16 

00 

137 

tenlt 

try  I 

itaoht 

en 

,  For 

I  P 

synolda 

Aug. 

20 

Udae. 

2 

00 

23 

• 

2 

00 

26 

• 

2 

00 

29 

i 

1 

00 

7 

eo 

138 

C 

wnpa 

y  "A" 

4 

th  It 

fa. 

try 

Aug. 

21 

MM. 

12 

00 

' 

2< 

• 

11 

00 

27 

t 

12 

00 

30 

13 

00 

4* 

00 

ACCOUNTS  RECEIVABLE 

Date 

F. 

Amount 

Date 

F. 

Amount 

139 

>mpa 

y  "B" 

th  It 

fa 

try 

Aug 

21 

MM. 

13 

00 

24 

• 

10 

00 

27 

* 

12 

00 

30 

• 

11 

00 

'46 

CIO 

140 

1 

ompa 

y  "C" 

th  Ir 

fa 

try 

Aug. 

21 

MM. 

12 

00 

24 

• 

14 

00 

27 

* 

11 

00 

30 

• 

13 

00 

SO 

Ofl 

141 

ompa 

y  "D* 

th  Ir 

fa 

try 

Aug. 

22 

Mdse. 

13 

00 

25 

* 

12 

00 

28 

• 

10 

00 

35 

oo 

142 

rooi 

"  A"  , 

20 

i  Cav 

ilr 

Aug. 

22 

Mds«. 

15 

00 

25 

• 

li 

00 

28 

• 

14 

00 

43 

t 

• 

ACCOUNTS  RECEIVABLE 

Date 

F. 

Anount 

Date 

F.   |   Amount 

143 

Li 

ut. 

U   Sni 

th 

40th 

Irtf 

antry 

Aug. 

20 

Udse. 

5 

00 

25 

" 

1 

00 

30 

• 

1 

7 

10 

10 

144 

Capt 

.  B. 

loore 

4 

th  IT 

fan 

try 

Aug. 

20 

Mdse. 

2 

50 

24 

It. 

1 

00 

28 

IT 

2 

s 

25 

75 

145 

lie 

ut.  ( 

.  Jon 

s, 

20th 

Cav 

airy 

Aug. 

21 

MM. 

Z 

00 

25 

t 

50 

29 

* 

1 

4 

25 

IS 

146 

Lie 

ut.  1 

.  Da* 

3, 

10th 

tnf 

antry 

Aug. 

21 

Md§». 

4 

50 

26 

• 

25 

30 

" 

1 
b 

75 

50 

! 

147 

Capt 

.  E. 

H&ine 

; 

)th  I 

nfa 

ntry 

Aug. 

21 

Mdo. 

2 

15 

25 

• 

1 

50 

29 

• 

1 
4 

20 
es 

ACCOUNTS  RECEIVABLE 

Date 

J 

Anount 

D*te 

P. 

Amount 

148 

Cap 

.  F 

Bown 

n, 

20th 

Cn 

ralry 

Aug 

23 

Mdse. 

2 

10 

27 

" 

1 

00 

30 

3 

75 
85 

149 

Li 

ut. 

>.  Boy 

40th 

In 

antry 

Aug. 

22 

Mdse. 

2 

00 

25 

• 

65 

27 

• 

1 

* 

15 

80 

150 

Lit 

ut. 

I.  Bra 

ke 

,   401 

h  1 

nfantry 

Aug. 

22 

Mds«. 

1 

50 

?5 

• 

1 

20 

29 

9 

1 

4 

30 

oo 

151 

Lie 

ut. 

.  Bry 

nt 

40U 

Ir 

f«ntry 

Aug. 

22 

HIM. 

90 

24 

• 

25 

28 

2 

7 

00 
J5 

152 

• 

Brun 

40th 

Ini 

antrjr 

Aug. 

23 

Udt*. 

i 

60 

86 

• 

2 

00 

9 

• 

1 

4 

00 
fo 

ACCOUNTS  RECEIVABLE 

i 

•. 

Date 

Anount 

Date 

F. 

Amount 

153 

Lie 

it.   1 

.  Brit 

I, 

40th 

In 

'antry 

AUG 

22 

Ndse. 

"3 

00 

23 

• 

1 

50 

27 

1 

5 

00 

5C 

154 

Opl. 

L. 

rooke 

4( 

th  In 

fan 

try 

Aug. 

24 

Kdse. 

95 

27 

1 

2 

10 

OS 

155 

Ca 

>t. 

.L 

. 

)th  I 

nfa 

itry 

Aug. 

S3 

(MM* 

50 

26 

* 

i 

15 

29 

2 

35 

00 

156 

Li« 

.  Odel 

1, 

40th 

In 

'antry 

Aug. 

24 

Mdse. 

1 

00 

27 

•     j 

•  <     -, 
'     -f 

05 

30 

•     i 

3 

25 

30 

157 

:      I 

»ut. 

0    Pa 

e, 

40th 

In 

Pantry 

f 

Aug. 

22 

Mds^ 

75 

26 

.    •    1 

75 

i 
i 

28 

'    •    i 

65 

1 
• 

SO 

1  •  i 
]     * 
1     \ 
\ 

2 

40 

55 

ACCOUNTS  RECEIVABLE 

Date 

P. 

Amount. 

-Date 

F. 

Amount 

158 

Lie 

it. 

Mort 

m, 

4Olh 

la 

antry 

Aug. 

23 

Mdso. 

40 

25 

• 

2 

00 

28 

• 

I 

00 

- 

40 

BILLS  RECEIVABLE  (ENLISTED  MEN) 

Date 

F. 

Amount 

Date 

F. 

Amount 

159 

eadt 

uartei 

s  ( 

>•  ,    4 

Oth 

Inf. 

Aug. 

31 

Coupon  Notes                 C.l.B 

123 

103 

DO 

160 

Jaoh 

ne  GUI 

C< 

•  ,   4C 

th 

Inf. 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

49 

00 

161 

Sani 

tary 

Detacl 

one 

t,  F1 

.   I 

eynold* 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

32 

00 

162 

C 

.  "A* 

4 

th  Ii 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

138 

00 

163 

C 

.   "B1 

4 

th  Ii 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

133 

00 

164 

C 

,.   "C" 

4 

th  Ir 

, 

• 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

129 

00 

165 

C 

.   "D" 

4( 

th  In 

f  . 

Aug. 

31 

Coupon  Notes               C.l.B. 

123 

133 

00 

166 

Tr 

•op  'A 

. 

Dth  C 

av 

Auf- 

31 

Coupon  Note»              C.l.B. 

123 

165 

00 

BILLS  RECEIVABLE  (NOTES) 

Date 

F 

Amount 

Date 

P. 

Amount 

167 

lach 

ne  Gu 

C 

.   40 

,h 

nf. 

Aug. 

15 

Rote  for  Cap.  Stock  G.L 

170 

45 

00 

168 

San 

tar 

Deta 

hn 

leynoUe 

Aug. 

15 

Hote  for  Cap.  Stock  G.L. 

170 

80 

00 

169 

T 

oop  " 

80th 

Cai 

Aug. 

15 

Note  for  Cap.  Stock  G.L. 

170 

60 

0 

GENERAL  LEDGER 

Date 

F. 

Amount 

Date 

P. 

Amount 

170 

Cap 

Ltal  S 

,O( 

Ace 

un 

191 

Aug. 

15 

Hdqrs.  Co.,   40th  Inf. 

58  shares                     C.B. 

124 

290 

00 

Aug. 

15 

M.  G.  Co.,   40th  Inf. 

C.B. 

124 

29  shares                      G.L. 

167 

145 

00 

Aug. 

15 

Sanitary  Detach. 

16  shares                     G.L. 

168 

80 

00 

Aug. 

15 

Co.   "A",   40th  Inf. 

65  shares                     C.B. 

124 

325 

00 

Aug. 

15 

Co.   "B",   40th  Inf. 

65  shares                     C.B. 

124 

325 

00 

Aug. 

15 

Co.   "C",   40th  Inf. 

65  shares                     C.B. 

124 

325 

00 

Aug. 

15 

Co.  ""D",  40th  Inf. 

65  shares                     C.B. 

124 

588 

00 

191 

Aug. 

15 

Troop  "A",   20th  Cav. 
C.B. 

124 

Aug. 

31 

Balance                           G.L. 

188 

2165 

00 

70  shares                     G.L. 

169 

360 

00 

216S 

00 

2165 

00 

171 

Re 

erve  I 

un< 

Ho.  entries  this  month. 

172 

Su 

plus  I 

un< 

Ho  entries  this  month. 

W- 

GENERAL  LEDGER 

Date 

F. 

Amount 

Date 

F. 

Anount 

173 

Divd 

der 

1  Ace 

>un 

No  entries  this  month. 

174 

Re 

servo 

Der 

sit  . 

CC( 

unt 

No  entries  this  month. 

175 

19] 
Aug. 

5 
2J 

Typewriter                        C.B. 

E 
125 

uldin 
80 

G  ' 
00 

id  Fi 

ctu: 

es 

21 

Safe                                     C.B. 

125 

40 

00 

21 

Desk                                     C.B. 

125 

25 

00 

21 

Office  Cabinet               C.B\ 

125 

50 

00 

21 

Adding  Machine                C.B. 

125 

200 

00 

21 

2  Cash  Registers           C.B. 

126 

140 

00 

21 

21 

^  Show  Cases                    C.B 
Soda  Fountain                  C.B. 

125 
125 

100 
120 

00 
00 

191! 
Aug. 

31 

Balance    '                        G.L 

188 

765 

00 

755 

00 

765 

00 

176 

19 
Aug. 

15 

31 

Coupon  Sales                    S.B. 

122 

Coup 
801 

>n 

so 

CCOUl 

191 
Aug. 

t 
31 

Coupons  Issued"          'JC.-I-B 

123 

880 

00 

31 

Coupons  Outstanding     G.L. 

188 

78 

20 

880 

00 

880 

00 

177 

R 

crea 

.ion  a 

id 

musei 

err 

Fund 

No  entries  this  month. 

GENERAL  LEDGER 

Date 

F. 

Anount 

Date 

P  ^ 

Amount 

178 

Beno 

it 

f  the 

^n 

re  G 

rr 

.son  Fund 

Ho  entries  thia  month. 

179 

Insur 

n< 

Aco< 

un 

JIo  entries  this  month'. 

180 

Disco 

n1 

Accoi 
Ifl 

Aug. 

nt 
30 

A.  B.  White  Co,                     L 

128 

00 

Aug. 

31 

Balance                             O.L 

188 

q 

00 

Aug. 

30 

C.  D.  Brovm  Co.                     L. 

129 

6 

00 

9 

30 

9 

OQ 

181 

- 

Reve 

ue 

Aoooi 

nt 

No  entries  thia  month. 

182 

191 
Aug. 

23 

S.  P.  Ry.,  Freight       C.B 

"Ope 
125 

•ating 

13 

Ex 
78 

ense 

Ace 

ount 

31 

Sergt.   Hill                      C.B 

125 

16 

67 

31 

Pvt.   Orr                            C.B 

125 

5 

00 

31 

Pvt.  Davis                         C.B. 

125 

5 

00 

31 

Pvt.  Bell                          C.B. 

125 

s 

00 

Aug. 

31 

Balance                                G.L 

188 

45 

4? 

45 

45 

45 

45 

183 

191 

Aug. 

5 
21 

Build 
A.  B.  Painter                 C.B 

Ings 
125 

and  F 

10 

xt 

00 

'63    ! 

Aug. 

*P 

31 

nse  Account 
Balance                                G.L 

188 

10 

00 

10 

00 

10 

00 

GENERAL  LEDGER 

Date 

F. 

Amount 

Date 

F. 

Amount 

184 

Acoou: 

s  P 

yablc 

Ac 

ount- 

-Au 

just,  1915 

G.L. 

A.  B.  White  Co. 

128 

100 

00 

C.  D.  Brown  Co. 

129 

180 

00 

Empire  Theater 

130 

75 

00 

E.  F.  Green  Co. 

131 

120 

50 

0.  K.  May  Co. 

132 

135 

CO 

Mdse.  Supply  Ce. 

133 

150 

00 

Aug. 

31 

Balance          C.L. 

88 

965 

SO 

0.  K.  Kooro  O- 

134 

205 

00 

965 

"SO 

965 

50 

185 

Account! 

Rec 

ivabl 

i  count 

—A 

ucupt,  1915 

.L. 

Hdqrs.  Co.,  40th  Inf. 

135 

36 

00 

U,  C.  Co.,  40th  Inf. 

136 

16 

00 

Sanitary  Detoh. 

13? 

7 

00 

Co.  'A*.  40th  Inf. 

138 

48 

00 

Co.  "B",  40th  Inf. 

139 

46 

00 

Co.  "C*,  40th  Inf. 

140 

50 

K 

Co.  *D',  40th  Inf. 

141 

35 

00 

Troop  "A*  ,  20th  Cav. 

142 

43 

00 

Lieut.  A,  Smith 

143 

7 

10 

Capt.  B.  Moore 

144 

5 

7  Si 

Lieut.  C.  Jones 

145 

4 

75 

Lieut.  D.  Davis 

146 

6 

50 

Carried  ParwaHl 

305 

1C 

GENERAL  LEDGER 

Date 

F. 

Amount 

Date 

F. 

Amount 

Accounts  I 

eoei 
G.L. 

rable 

Voo 

unt— 

AUJ 

ust,  1915.  Cont. 

Brought  Forward 

305 

10 

Gapt.  E.  Haines 

147 

4 

05 

: 

Capt.  F.  Bowman 

148 

3 

85 

Lieut.  G.  Boyd 

149 

3 

00 

i 

Lieut.  H.  Bracken 

160 

4 

00 

Lieut.  I.  Bryant 

151 

3 

15 

I 

Maj.  J.  Brand 

162 

4 

50 

Lieut.  K.  Britt 

153 

5 

50 

Col.  L.  Brooke 

154 

2 

OS 

Gapt.  11.  Muir 

155 

2 

00 

Lieut.  H.  Odell 

L56 

3 

30 

Lieut.  0.  Page 

167 

2 

55 

Lt.jrCol.  P.  Morton 

158 

3 

40 

Aug. 

31 

Balance            C.L. 

188 

348 

05 

348 

05 

348 

OS 

186 

Bills  Reoeiva 

)le 
}.L. 

EnliB- 

cd 

len) 

<Vcc 

mnt—  August,  1915 

Hdqra.  Co.,  40th  Inf. 

L59 

101 

00 

M.  G.  Co.,  40th  Inf. 

160 

49 

00 

Sanitary  Detoh. 

161 

32 

00 

Co.;.  "A",  40th  Inf. 

162 

138 

00 

Co.  "B",  40th  Inf. 

163 

133 

00 

Co.:"C",  40th  Inf. 

164 

129 

00 

Co.,  'D',  40th  Inf. 

165 

133 

00 

Troop  "A",  20th  Cav- 

166 

165 

00 

Aug. 

31 

Balance           G.L 

188 

880 

00 

860 

00 

880 

00 

GENERAL  LEDGER 

Date 

F.   Amount 

Date 

F. 

Amount 

187 

Bills  Rec 

ivat 

Le  (No 

,e 

Ace 

un 

—August.  1915 

G.L, 

M.  G.  Co.,  40th  Inf. 

167 

45 

0 

Sanitary  Detch. 

168 

80 

00 

Troop  "A",  20th  Cav. 

169 

50 

00 

Aug 

31 

Balance            G.L 

188 

175 

00 

175 

00 

175 

00 

188 

Tn 

il  B 

dance 

gust 

31 

19-15 

Bldgs.  and  Fix.     G.L 

175 

755 

00 

Capital  Stock       G.L 

170 

2165 

00 

lidse.  on  Hand  8/20 

Acots.  Payable      G.L 

184 

965 

50 

Purchases          P.B 

121 

1323 

84 

Sales             S.B 

122 

1293 

76 

Cash  on  Hand        C.B. 

125 

74 

12 

Coupons  Outatanding  G.L 

176 

78 

20 

Cash  in  Bank       C.B. 

125 

900 

00 

Discounts          G.L. 

180 

9 

00 

Operating  Expense   G.L, 

182 

45 

45 

Bldgs.  and  Fix.  Exp.  G.L. 

183 

10 

00 

Accts.  Rec.         G.L. 

185 

348 

05 

Billa  Reo.  (E.  U.)   G.L. 

186 

860 

00 

Bills  flee.  (Notes)   G.L. 

137 

175 

00 

4511 

46 

4511 

46 

189 

Trad 

ng 

Lccoun 

ugusl 

31 

,  191* 

Aug. 

31 

Purchases         p.B. 

121 

1323 

34 

Aug. 

31 

Sales             S.B. 

122 

1293 

76 

Aug. 

31 

Mdse.  on  Hand  per  Inven- 

Aug. 

31 

Grose  Profit       G.L. 

190 

263 

6  si 

tory           I.B. 

126" 

293 

71 

1587 

1587 

47 

GENERAL  LEDGER 

Date 

F. 

Amount 

Date  1 

F.   Amount 

190 

Profit  s 

nd  I 

>ss  Ao< 

ou 

t—  At 

gU3 

t  31,  1915 

G.L. 

G.L, 

Operating  Expense 

182 

45 

45 

Gross  Profit 

189 

263 

63 

Bldgs.  and  Fix.  Expense 

183 

10 

00 

Discounts 

180 

9 

00 

Hot  Profit 

191 

217 

18 

272 

62 

.272 

63 

191 

Bali 

nee 

Jheet- 

Ai 

ust 

1, 

1915 

Assets 

Liabilities 

Bldgs.  and  Fix.     G.L. 

175 

755 

00 

Capital  Stock       G.L. 

170 

2166 

00 

Mdse.  on  Hand  8/31  G.L. 

126 

293 

71 

Acots.  Payable      G.L. 

'184 

965 

50 

Cash  on  Hand       C.B. 

125 

74 

12 

Coupons  Outstanding  G.L. 

176 

78 

20 

Cash  in  Bank       C.B. 

125 

900 

00 

Net  Profit         G.L. 

190 

217 

18 

Aocts.  Reo.        G.L. 

185 

348 

05 

Bills  Reo.  (E.  M.)  G.L. 

186 

880 

00 

Bills  Reo.  (Notes)  G.L. 

187 

175 

00 

3425 

88 

3425 

88 

EXCHANGE  COUNCIL  BOOK 

Proceedings  of  the  Exchange  Counoil 

Port  Reynolds,  Texas, 

August  2,   1915. 

The  Post  Exchange  Council  met  pursuant  to  the  call  of  its  Presi- 
dent at         °M         the  raembers  except  the  commanding  officer  of  Company 


"c"'  40tThenfollowing  financial  statement  of  the  Post  Exchange  for  the 
part  men™  ofAugust!  1915,  was  submitted  by  the  Auditing  Committee  and 
read  to  the  Exchange  Council: 

"Trial  Balance  —  August  31,  1915 

Capital  Stock  ^.OO 

Accounts  Payable  1293!?6 

Sales 

Coupons:   Issued         §880.00 

Sales      801.80 

Outstanding 
Discounts 

Buildings  and  Fixtures  3  755  .00 

Purchases  «»•*« 

Mdse.  on  Hand  Aug.  15,  1915—  None 
Cash  on  Hand  JX'JJ 

Cash  in  Bank  900-00 

Operating  Expense 

Buildings  and  Fixtures  Expense        -10/0,0- 
Accounts  Receivable  °48'°^ 

Bills  Receivable  (Enlisted  men)       880.00 


"Trading  Account—  August  31,  1915 

Total  Purchases  §1323.84 

Total  Sales 

Mdse.  on  Hand  8/31/15,  per  inven- 

tory 
Gross  Profit 


"Profit  and  Loss  Account  —  August  31,  1915 

Gross  Profit  *26q'oo 

Discounts  ..    . 

Operating  Expense  3  «5.45 

Buildings  and  Fixtures  Expense  »J2"io 

Net  P'oflt  §§72763     $272^3 


For  Financial  Statement  of  subsequent  months,  or  when  department  accounts  are 
kept  see  Par.  265. 


EXCHANGE  COUNCIL  BOOK 

"Balance  Sheet— August  31,  1915 

'Liabilities: 

Capital  Stock  $2165.00 

Accounts  Payable  965.60 

Coupons  Outstanding  78.20 

Net  Profits  217. la 

Total  Liabilities  $3425.88 

Assets: 

Buildings  and  Fixtures  0755.00 

Merchandise  on  Hand  293.71 

Cash  on  Hand  74.12 

Cash  in  Bank  900.00 

Accounts  Receivable  348.05 

Bills  Receivable  (Enlisted  men)  880.00 

Bills  Receivable  (Notes)  175.00 

Total  Assets  $3425.88 

"Certificate  of  Exchange  Officer: 

"I,  G.  Boyd,  Exchange  Officer,  Port  Reynolds,  Texas,  hereby  cer- 
tify that  of  the  moneys  for  which  I  am  accountable, — — 

Nine  hundred  &  no/100 Dollars,  ($900.00),  is  deposited  in 

The  First  National  Bank  of  Reynoldsville,  Texas,  and — 

Seventy-four  &  12/100 Dollars,  (|74.12),  is  in  cash  in 

the  Post  Exchange. 


1st  Lieut.,  10th  Infantry, 
Exchange  Officer 

"Your  committee  took  an  inventory  of  the  merchandise,  fixtures, 
and  cash,  on  August  31,  1916,  and  audited  the  accounts  of  the  Post 
Exchange  the  same  date.  To  the  best  of  its  knowledge  and  belief,  the 
above  financial  statement  of  the  Post  Exchange  for  the  part  month  of 
August,  1915,  is  true  and  correct. 


1st  Lieut.,  40th  Infantry 


1st  Lieut.,  40th  Infantry 
Auditing  Committee." 

The  following  motion  was  then  carried:  "That  the  financial 
statement  of  the  Post  Exchange  for  the  part  month  of  August,  1915,  as 
submitted  and  read,  be  accepted,  and  that  the  expenditures  and  purchases 
for  the  same  period  be  approved." 

The  following  proceedings  of  a  Board  of  Officers  were  then  sub- 
mitted and  read  to  the  Exchange  Council: 


EXCHANGE  COUNCIL  BOOK 

"Proceedings  of  a  Board  of  Officers  convened  at  Port  Reynolds. 
Texas,  pursuant  to  the  following  order: 

Fort  Reynolds,  Texas, 

August  31,  1915. 

Special  Orders) 
No.     23  ) 

1.  Under  the  provisions  of  Par.  9,  G.  0.  No.  176,  W.  D.,  1909, 
a  Board  of  Officers  is  appointed  to  meet  at  this  station  at  1:30  P.  M., 
today,  or  as  soon  thereafter  as  practicable,  to  appraise  the  Post 
Exchange,  and  determine  the  present  worth  of  the  portion  of  it  owned  by 
Troop  A,  20th  Cavalry. 

Detail  for  the  Board 
Major  J.  Brand,  40th  Infantry, 
Captain  B.  lioore,  40th  Infantry, 
Captain  P.  Bowman,  20th  Cavalry. 

By  order  of  Colonel  Brooke. 


G. 


Captain  and  Adjutant,  40th  Infantry, 
Adjutant. 

The  Board  met  pursuant  to  the  foregoing  order  at  1:30  P.  M. 

Present:  All  the  members. 

The  Board  took  an  inventory  of  the  merchandise,  fixtures,  and 
cash,  of  the  Post  Exchange,  and  examined  the  accounts  of  the  Exchange. 

It  finds  and  appraises  the  assets  of  the  Post  Exchange  as  fol- 
lows: 

Buildings  and  Fixtures  $755.00 

Merchandise  on  Hand  293.71 

Cash  on  Hand  74.12 

Cash  in  Bank  900.00 

Accounts  Receivable  348.05 
Bills  Receivable  (Enlisted  men)     880.00 

Bills  Receivable  (Notes)  175.00 

Total  Assets  83425.88 


It  finds  the  obligations  of  the  Post  Exchange  to  be  as  follows: 

Accounts  Payable  §965-50 

3  Outstanding 
Total  Obligations 


Coupons  Outstanding  78.20 

51043.70 


The  Board  therefore  finds  the  present  worth  of  the  Post  Ex- 
change to  be  82382.18;  the  present  worth  of  each  share,  $5.5016;  and 
the  present  worth  of  Troop  A's,  20th  Cavalry,  portion,  jf385.ll. 

There  being  no  further  business,  the  Board  adjourned  sine  die. 


G.  O.  176,  W.  D.  1909  should  now  read  Post  Exchange  Regulations. 


EXCHANGE  COUNCIL  BOOK 


Majoitf 


40th  Infantry, 
President 


(B. 


Captain,  40th  Infantry, 
Member 


Captain,  20th  Cavalry, 
Recorder 


APPROVED! 


Colonel,  40th  Infantry, 
Commanding." 


The  following  motion  was  then  carried:  "That  the  above  proceed- 
ings, as  submitted  and  read,  be  accepted,  and  that  the  same  be  incor- 
porated in  the  present  proceedings  of  the  Exchange  Council.  * 

The  following  motion  was  then  carried:  "That  the  Exchange  pay 
Troop  A,  20th  Cavalry,  $92.00  in  cash,  and  give  its  note  for  sixty  days 
for  balance  due." 

The  following  motion  was  then  -carried:  "That  in  compliance  with 
Par.  17,  G.  0.  176,  W.  D.,  1909,  a  Reserve  Fund  of  $250.00  be  created 
and  deposited  in  the  Savings  Department,  First  National  Bank  of  Reyn- 
oldsville,  Texas,  and  that  all  net  profits  be  credited  to  this  fund 
until  the  same  shall  have  reached  the  prescribed  amount." 

The  following  motion  was  then  carried-.  "That,  in  order  the  Ex- 
change may  discount  all  accounts  payable,  a  Surplus  Fund  of  §1000.00  be 
created,  and  after  the  Reserve  Fund,  as  previously  provided,  is  created, 
ten  per  cent  of  all  net  profits  be  credited  to  this  fund  until  the  same 
shall  have  reached  the  above  prescribed  amount." 

There  being  no  further  business,  the  Exchange  Council  adjourned 
to  meet  at  the  call  of  its  President. 


(ft. 


Captain,  40th  Infantry 
President 


1st  Lieut.,  40th  Infantry, 
Exchange  Officer  and  Recorder 


Approved:  September  3,  1915. 


Colonel,  40th  Infantry, 
Commanding. 


CHAPTER  IV 
PRACTICAL  SET  OF  DOUBLE  ENTRY  ACCOUNTING 

193.  The  data  given  below  are  the  transactions  of  the  Post 
Exchange,  Fort  Reynolds,  Texas,  for  the  month  of  September.* 
It  is  recommended  that  the  reader  work  these  accounts  out,  and 
write  up  the  proceedings  of  the  exchange  council  himself.     Such 
practice  will  be  of  more  benefit  than  any  amount  of  studying 
the  theory  of  accounting. 

For  convenience  the  coupon  issue  and  credit  sales  to  organi- 
zations and  officers  are  given  in  tabular  form. 

194.  COUPON  ISSUE : 

Date    Hd.  Co.    M.G.  Co.      S.  D.          Co.  A          Co.  B          Co.  C  Co.  D 

1  $10.00     $4.00     $2.00     $10.00     $11.00     $10.00     $10.00 

2  12.00  5.00  3.00  11.00  12.00  10.00  13.00 

3  12.00  5.00  2.00  10.00  11.00  13.00  12.00 

4  11.00  6.00  3.00  12.00  13.00  11.00  11.00 

5  11.00  6.00  3.00  12.00  12.00  13.00  10.00 

6  10.00  5.00  2.00  11.00  11.00  12.00  15.00 

7  12.00  4.00  1.00  13.00  10.00  11.00  11.00 

8  15.00  3.00  2.00  13.00  15.00  12.00  8.00 

9  11.00  4.00  2.00  14.00  12.00  11.00  10.00 

10  7.00       6.00       3.00       10.00       11.00       12.00         7.00 

11  10.00       6.00       2.00         8.00         7.00       16.00       10.00 

12  7.00       5.00       2.00         8.00       11.00       12.00       11.00 

13  11.00       4.00       3.00       11.00         8.00         6.00       12.00 

14  9.00       3.00       2.00       10.00       11.00         8.00       11.00 

15  10.00  4.00  1.00  11.00  12.00  11.00  12.00 

16  11.00  3.00  2.00  12.00  13.00  12.00  12.00 

17  12.00  7.00  3.00  11.00  11.00  10.00  10.00 

18  12.00  6.00  3.00  10.00  9.00  10.00  10.00 

19  11.00  6.00  2.00  12.00  12.00  11.00  10.00 

20  13.00  6.00  3.00  10.00  9.00  8.00  11.00 

21  10.00  5.00  3.00  9.00  11.00  12.00  9.00 

22  8.00       5.00       2.00       12.00       11.00       11.00       12.00 

23  11.00       5.00       3.00       11.00       12.00         8.00         8.00 

*Before    making    any    entries    for    September,    coyer    motions    in    proceedings    of 
exchange  council  for  August  with  proper  journal  entries. 


108  A  MANUAL  FOR  POST  EXCHANGES 


Date 

Hd.  Co. 

M.  G.  Co. 

S.D. 

Co.  A 

Co.  B 

Co.C 

Co.D 

24 

13.00 

5.00 

2.00 

13.00 

9.00 

11.00 

12.00 

25 

12.00 

6.00 

3.00 

10.00 

12.00 

13.00 

11.00 

26 

10.00 

5.00 

2.00 

11.00 

11.00 

9.00 

9.00 

27 

13.00 

6.00 

3.00 

9.00 

12.00 

12.00 

13.00 

28 

12.00 

6.00 

3.00 

11.00 

13.00 

12.00 

11.00 

29 

11.00 

6.00 

2.00 

12.00 

11.00 

11.00 

12.00 

30 

(Exchange  closed  for 

inventory) 

195.     CREDIT  SALES: 

Date 

Hd.  Co. 

M.  G.  Co. 

S.D. 

Co.  A 

Co.B 

Co.C 

Co.D 

1     < 

£  7.32 

$3.34 

$  .65 

$  6.46 

$  8.56     $15.74 

$  4.61 

2 

.60 

2.17 

1.25 

13.04 

4.70 

12.86 

8.82 

3 

14.86 

4.48 

3.00 

7.10 

4.66 

6.75 

4 

6.75 

.80 

2.10 

10.15 

4.56 

16.09 

12.39 

5 

6 

2.48 

.40 

2.75 

6.43 

5.33 

.60 

2.10 

7 

11.66 

8.50 

2.66 

10.00 

2.70 

1.80 

8 

.79 

2.10 

1.95 

7.78 

2.10 

1.20 

6.75 

9 

8.50 

.30 

6.73 

.65 

16.34 

.60 

10 

10.20 

7.50 

2.78 

4.46 

12.40 

1.65 

1.44 

11 

2.45 

3.40 

3.15 

2.00 

11.75 

12.99 

6.15 

12 

13 

15.16 

5.25 

.15 

.30 

2.86 

.60 

6.75 

14 

2.00 

1.00 

1.50 

16.47 

9.95 

.60 

.60 

15 

4.65 

6.15 

.55 

.27 

4.68 

11.26 

6.75 

16 

8.39 

3.00 

1.60 

.66 

7.50 

.60 

5.92 

17 

6.90 

3.10 

.48 

7.84 

7.89 

2.03 

18 

9.20 

8.10 

2.25 

16.79 

3.60 

1.89 

12.60 

19 

20 

6.15 

.85 

1.80 

2.38 

7.35 

6.65 

16.39 

21 

4.03 

.50 

1.00 

11.55 

8.79 

10.84 

3.00 

22 

3.10 

2.70 

.25 

6.65 

4.70 

2.80 

23 

10.00 

6.70 

2.66 

7.38 

7.18 

8.82 

6.75 

24 

6.86 

2.90 

1.90 

6.90 

7.39 

3.39 

25 

5.00 

4.95 

2.75 

7.75 

3.48 

8.96 

13.82 

26 

PRACTICAL  SET  OF  DOUBLE  ENTRY  ACCOUNTING       109 


Date 

Hd.  Co. 

M.  G.  Co. 

S.D. 

Co.  A 

Co.B 

Co.  C 

Co.D 

27 

4.50 

1.10 

.44 

5.40 

1.25 

6.65 

8.49 

28 

9.75 

3.90 

2.16 

6.95 

14.70 

.75 

.75 

29 

9.75 

3.00 

11.55 

12.50 

9.25 

20.00 

30 

(Exchange 

closed  for 

inventory) 

Date 

Smith 

Moore 

Davis 

Haines 

Boyd 

Bracken 

Bryant 

1 

$  .25 

$   .40 

$  .20 

$1.40 

2 

.25 

$  .50 

3 

$   .25 

$  .45 

4 

.60 

.15 

.90 

5 

.25 

.60 

6 

.45 

1.10 

7 

.30 

.20 

8 

.30 

.45 

9 

.70 

.35 

.75 

10 

.10 

.10 

.10 

11 

.65 

12 

.85 

.20 

13 

.40 

.20 

14 

.30 

.50 

15 

.15 

.10 

.70 

16 

.20 

17 

.10 

18 

.25 

.20 

19 

.20 

.20 

20 

3.00 

.20 

21 

.20 

.15 

22 

.15 

.40 

23 

.30 

.45 

24 

.40 

1.20 

.50 

25 

.70 

1.00 

.25 

26 

.95 

.55 

27 

.85 

.45 

.20 

28 

.50 

.40 

29 

.35 

.30 

.45 

110  A  MANUAL  FOR  POST  EXCHANGES 


Date 

Brand 

Britt 

Brooke 

Muir           Odell 

Page 

Morton 

1 

$  .60 

$    .80 

$  .25 

2 

$   .20 

$    .70 

3 

.60 

$  .45 

4 

.80 

$  .75 

5 

.20           .60 

.45 

6 

.25 

.20 

.40 

7 

.40 

.20 

8 

.20 

.20 

.70 

9 

1.10 

.10 

10 

.15 

.15 

.50 

11 

.10 

.80 

12 

.10 

13 

2.00 

.15 

14 

1.20 

.20 

15 

.40 

1.50 

16 

.45 

.80 

17 

1.00 

.15 

18 

.50 

.40 

19 

.80 

3.00 

20 

.50 

.75 

21 

.90 

22 

.45 

.20 

.75 

23 

.40 

.25 

.75 

24 

.75 

.30 

25 

.85 

.10 

26 

.35 

.45 

27 

.40 

1.00 

28 

.30 

.60 

29 

.60 

.90 

196.  SEPTEMBER  1,  1915. 
Gash  Sales,  $15.00. 

Coupon  Sales,  $65.00. 

197.  SEPTEMBER  2,  1915. 

Cash  Sales,  $14.75. 
Coupon  Sales,  $64.30. 


PRACTICAL  SET  OF  DOUBLE  ENTRY  ACCOUNTING       111 

All  accounts  receivable  of  officers  and  organizations  were 
paid  this  day;  total  collected,  $305.05.  Note:  Credit  all 
Accts.  Rec. 

Paid  $30.00  for  fire  insurance  policy  of  $1,500.00  on  fixtures 
and  stock — time,  three  years. 

198.  SEPTEMBER  3,  1915. 
Cash  Sales,  $13.39. 

Coupon  Sales,  $72.25. 

Received  from  E.  F.  Green  Co.,  merchandise  billed  at 
$175.00,  3%  10  days;  freight  $1.30.  Note:  All  freight  will 
be  considered  to  have  been  paid  in  cash  or  by  check  to  S.  P.  Ry. 
on  date  of  receipt  of  goods. 

Paid  E.  F.  Green  Co.,  $125.00  less  3%  ;  bill  of  Aug.  23rd. 

Gave  Troop  A,  20th  Cavalry,  check  for  $92.00;  credited 
Bills  Receivable  (enlisted  men),  $165.00;  credited  Bills  Re- 
ceivable (notes),  $50.00;  credited  Accounts  Receivable,  $43.00; 
returned  its  note  for  $50.00;  and  gave  a  note  of  $35.11  for  30 
days  with  interest  at  6%  from  date  for  its  share  of  the  net 
profits  of  August.  Debited  Capital  Stock,  $350.00  (70  shares 
of  Troop  A's  stock)  ;  debited  Profit  &  Loss,  $35.11  for  note 
given  Troop  A  for  its  share  of  the  net  profits. 

Credited  Reserve  Fund  for  $182.07  from  Net  Profits,  which 
was  deposited  in  Savings  Department,  Reynoldsville  National 
Bank,  to  the  credit  of  Reserve  Fund,  with  interest  at  4% 
payable  quarterly,  on  Jan.  1,  Apr.  1,  Jul.  1,  and  Oct.  1. 

199.  SEPTEMBER  4,  1915. 
Cash  Sales,  $27.74. 

Coupon  Sales,  $72.25. 

Received  from  Empire  Theater,  2,000  tickets  billed  at 
$150.00 ;  time,  30  days. 

Paid  G.  H.  May  Co.,  $135.00  less  3%  ;  bill  of  Aug.  24th. 

Pay  day :  Received  from  enlisted  men  collections  for  coupon 
notes,  $690.00  all  coupon  notes  payable  being  paid  except  that 
of  Pvt.  M.  Jones,  Co.  A,  40th  Inf.,  who  deserted  Sept.  3rd— 
note,  $5.00,;  that  of  Pvt.  N.  Smith,  Co.  B,  40th  Inf.,  who  died 
on  Sept.  2nd — note,  $5.00,  but  at  the  inventory  of  his  effects, 
a  one  dollar  coupon  book  issued  to  him  which  had  had  a  ten 


112  A  MANUAL  FOR  POST  EXCHANGES 

cent  coupon  detached  was  found  and  turned  over  to  the  ex- 
change officer;  that  of  Pvt.  P.  Brown,  Co.  C,  40th  Inf.,  who 
was  discharged  on  Sept.  1st,  and  his  company  commander, 
Capt.  E.  Haines,  through  oversight,  omitted  the  charge  from 
his  final  statements — note,  $5.00;  that  of  Pvt.  R.  Murphy, 
M.  G.  Co.,  who,  although  paid,  did  not  appear  at  the  exchange 
collection  table  and  pay  his  coupon  note — note,  $5.00;  and 
that  of  Pvt.  J.  D.  Owens,  Co.  B,  40th  Inf.  transferred  to  50th 
Infantry,  Ft.  Blank,  Tex., — coupon  note  $6.00. 

200.  SEPTEMBER  5,  1915. 
Cash  Sales,  $25.60. 

Coupon  Sales,  $68.15 

Received  from  Capt.  E.  Haines,  check  for  $5.00  to  pay  Pvt. 
Brown's  note  of  $5.00. 

201.  SEPTEMBER  6,  1915. 
Cash  Sales,  $26:20. 

Coupon  Sales,  $71.35. 

Received  from  O.  K.  Moore  Co.,  merchandise  billed  at 
$125.00,  3%  10  days;  freight  $.85. 

Paid  Mdse.  Supply  Co.,  $150.00  less  3%  ;  bill  of  Aug.  26th. 
Paid  $25.00  for  athletic  supplies  for  gymnasium. 

202.  SEPTEMBER  7,  1915. 
Cash  Sales,  $19.10 

Coupon  Sales,  $66.75. 

Paid  C.  D.  Brown  Co.,  $180.00  less  3% ;  bill  of  Aug.  27th. 

Paid  $12.00  for  repairs  on  Post  Exchange  Building. 

203.  SEPTEMBER  8,  1915. 
Cash  Sales,  $18.05. 

Coupon  Sales,  $67.15. 

Received  from  O.  K.  Moore  Co.,  merchandise  billed  at 
$125.00,  3%  10  days;  freight  $1.10. 

Paid  A.  B.  White  Co.,  $205.00  less  2% ;  bill  of  Aug.  28th. 

Received  from  Quartermaster,  Ft.  Blank,  check  for  $6.00,  in 
payment  of  Pvt.  J.  D.  Owens  coupon  note  collected  on  pay 
roll. 


PRACTICAL  SET  OF  DOUBLE  ENTRY  ACCOUNTING       113 

204.  SEPTEMBER  9,  1915. 
Cash  Sales,  $19.27. 

Coupon  Sales,  $67.15. 

Received  from  A.  B.  White  Co.,  merchandise  billed  at 
$200.00,  2%  10  days;  freight  $1.15. 

Paid  O.  K.  Moore  Co.,  $205.00  less  3%;  bill  of  Aug.  29th. 

205.  SEPTEMBER  10,  1915. 
Cash  Sales,  $18.98. 

Coupon  Sales,  $69.70. 

206.  SEPTEMBER  11,  1915. 
Cash  Sales,  $16.61. 

Coupon  Sales,  $63.35. 

Received  from  Empire  Theater,  2,000  tickets  bill  at  $150.00; 
time,  30  days. 

207.  SEPTEMBER  12,  1915. 

Cash  Sales,  $11.77. 
Coupon  Sales,  $43.45. 

208.  SEPTEMBER  13,  1915. 

Cash  Sales,  $17.37. 

Coupon  Sales,  $71.70. 

Received  from  C.  D.  Brown  Co.,  merchandise  billed  at 
$250.00,  3%  10  days;  freight  $1.65. 

Paid  E.  F.  Green  Co.,  $175.00  less  3%  ;  bill  of  Sept.  3rd. 

Paid  $5.00  for  plate  glass  to  replace  broken  glass  in  show- 
case and  $1.50  for  expenses  of  putting  it  in. 

209.  SEPTEMBER  14,  1915. 
Cash  Sales,  $15.12. 

Coupon  Sales,  $64.05. 

Received  from  Mdse.  Supply  Co.,  merchandise  billed  at 
$200.00,  3%  10  days;  freight  $1.41. 

210.  SEPTEMBER  15,  1915. 
Cash  Sales,  $16.66. 

Coupon  Sales,  $65.50. 

Cash  in  Cash  Register  50c  short. 


114  A  MANUAL  FOR  POST  EXCHANGES 

211.  SEPTEMBER  16,  1915. 

Cash  Sales,  $18.18. 
Coupon  Sales,  $70.05. 

Received  from  G.  H.  May  Co.,  merchandise  billed  at  $150.00, 
8%  10  days;  freight  $.65. 

Paid  G.  H.  May  Co.,  $150.00  less  3%  ;  bill  of  Sept.  6th. 

212.  SEPTEMBER  17,  1915. 
Cash  Sales,  $15.32. 

Coupon  Sales,  $64.40. 

Received  from  O.  K.  Moore  Co.,  merchandise  billed  at 
$175.00,  3%  10  days;  freight  $1.35. 

213.  SEPTEMBER  18,  1915. 
Cash  Sales,  $14.42. 

Coupon  Sales,  $62.00. 

Paid  O.  K.  Moore  Co.,  $250.00  less  3%  ;  bills  of  Sept.  6th 
and  8th;  also,  A.  B.  White  Co.,  $200.00  less  2%  ;  bill  of  Sept. 
9th. 

214.  SEPTEMBER  19,  1915. 
Cash  Sales,  $14.24. 

Coupon  Sales,  $55.25. 

215.  SEPTEMBER  20,  1915. 
Cash  Sales,  $16.06. 

Coupon  Sales,  $59.20. 

Cash  in  Cash  Register  lOc  in  excess. 

216.  SEPTEMBER  21,  1915. 
Cash  Sales,  $13.31. 

Coupon  Sales,  $64.50. 

Received  from  A.  B.  White  Co.,  merchandise  billed  at 
$200.00,  2%  10  days;  freight  $1.11. 

Returned  to  A.  B.  White  Co.,  merchandise  listed  at  $20.00 
on  their  bill  of  this  date. 

217.  SEPTEMBER  22,  1915. 
Cash  Sales,  $11.44. 

Coupon  Sales,  $65.00. 

Received  from  E.  F.  Green  Co.,  merchandise  billed  at  $225.00, 
3%  10  days;  freight  $1.49. 


PRACTICAL  SET  or  DOUBLE  ENTRY  ACCOUNTING       115 

Paid  Empire  Theater,  $75.00 ;  bill  of  Aug.  22nd. 
Received  from  Mdse.  Supply  Co.,  credit  memo,  for  $3.25  for 
overcharge  in  their  invoice  of  Sept.  14th. 

218.  SEPTEMBER  23,  1915. 
Cash  Sales,  $12.21. 

Coupon  Sales,  $58.80. 

Received  from  Mdse.  Supply  Co.,  merchandise  billed  at 
$200.00,  3%  10  days;  freight  $1.25 

Paid  C.  D.  Brown  Co.,  $250.00  less  3%  ;  bill  of  Sept.  13th. 

219.  SEPTEMBER  24,  1915. 
Cash  Sales,  $10.15. 

Coupon  Sales,  $62.27. 

Received  from  C.  D.  Brown  Co.,  merchandise  billed  at 
$150.00,  3%  10  days;  freight  $.99. 

Received  from  A.  B.  White.  Co.,  credit  memo,  for  $20.00  for 
goods  returned  them  Sept.  21st. 

220.  SEPTEMBER  25,  1915. 
Cash  Sales,  $12.34. 

Coupon  Sales,  $65.15. 

Received  from  Empire  Theater,  2,000  tickets  billed  at 
$150.00;  time,  30  days. 

Paid  $25.00  for  expenses  of  Post  Baseball  Team. 

221.  SEPTEMBER  26,  1915. 
Cash  Sales,  $16.52. 

Coupon  Sales,  $60.35. 

222.  SEPTEMBER  27,  1915. 
Cash  Sales,  $9.13. 

Coupon  Sales,  $64.00. 

Received  from  G.  H.  May  Co.,  merchandise  billed  at  $100.00, 
3%  10  days;  freight  $1.40. 

223.  SEPTEMBER  28,  1915. 
Cash  Sales,  $11.21. 

Coupon  Sales,  $55.45. 

Received  from  O.  K.  Moore  Co.,  merchandise  billed  at 
$100.00,  3%  10  days;  freight  $.90. 


116  A  MANUAL,  FOR  POST  EXCHANGES 

224.  SEPTEMBER  29,  1915. 
Cash  Sales,  $15.64. 

Coupon  Sales,  $41.50. 

Received  from  Amusement  Supply  Co.,  Kansas  City,  Mo., 
one  motion  picture  machine  complete,  billed  at  $350.00;  time, 
60  days. 

225.  SEPTEMBER  30,  1915. 
Exchange  closed  for  inventory. 

Paid  Sergt.  Hill,  exchange  steward,  $50.00,  and  to  Pvts. 
Orr,  Davis,  and  Bell,  $15.00  each. 

Lieuts.  H.  Bracken  and  O.  Page  were  detailed  by  the  com- 
manding officer  to  take  inventory  of  and  audit  the  accounts  of 
the  Post  .Exchange. 

The  results  of  the  inventory  were: 

Buildings  and  Fixtures,  $1,105.00. 

Merchandise  on  hand,  $302.48. 

Cash  on  hand,  $15.75. 

Cash  in  Bank,  $ —  — .  (Balance  of  Cash  Account  minus 
$15.75;  determine  this  yourself.) 

226.  On  this  date  (Sept.  30)   the  2nd  and  3rd  Battalions 
of  the  40th  Infantry  arrived  at  the  post  as  part  of  its  perma- 
nent garrison,  and  their  organizations  requested  membership  in 
the  Post  Exchange.     A  board  of  officers  consisting  of  Major 
J.  Brand,  40th  Inf.,  Capt  R.  Anderson,  40th  Inf.,  and  Capt.  B. 
Moore,  40th  Inf.,  was   appointed  by  the   commanding  officer 
under  the  provisions  of  Par.  9,  G.  O.   176,  W.  D.,  1909,  to 
appraise  the  Post  Exchange  and  determine  its  present  worth. 
(Special  Orders,  No.  36,  Sept.  30th,  1915,  Fort  Reynolds.) 

Balance  the  accounts,  strike  a  trial  balance  and  make  com- 
plete financial  statement  to  be  rendered  to  the  Post  Exchange 
Council  at  its  next  meeting,  which  has  been  called  for  at  1 :30 
p.  M.,  Oct.  3,  1915. 

Note :  It  is  recommended  that  the  accounts  be  opened  in  a 
common  pencil  tablet  that  has  lines,  the  reader  himself  making 
the  vertical  ruling  for  the  different  account  books  used.  Place- 
no  more  than  one  account  to  each  page  in  the  tablet.  After  the 
accounts  are  closed  and  balanced  on  the  tablet  paper,  they 


PRACTICAL  SET  OF  DOUBLE  ENTRY  ACCOUNTING       117 

may  be  typewritten  on  the  blank  letter  paper,  leaving  several 
lines  between  accounts.  After  the  pages  are  typewritten  they 
should  be  bound  just  the  same  as  pay  rolls. 

The  journal  may  be  used  if  desired.  Journal  ruling  is 
shown  in  Form  H. 

227.  OCTOBER  1,  1915. 

The  Board  of  Officers  appointed  above  met  and  appraised  the 
Post  Exchange,  as  follows:  Buildings  and  Fixtures  $1,342.25, 
a  5%  depreciation  being  charged  to  the  $755  of  fixtures  bought 
during  August;  the  rest  of  the  assets  and  liabilities  were  ap- 
praised as  shown  in  the  monthly  financial  statement  rendered 
by  the  exchange  officer  to  the  Exchange  Council.  Note: 
Accrued  interest  of  55c  from  reserve  fund  due  but  not  received. 

Write  up  the  proceedings  of  this  board. 

228.  OCTOBER  2,  1915. 

The  commanding  officer  approved  the  above  proceedings  and 
sent  them  to  the  Exchange  Council. 

229.  OCTOBER  3,  1915. 

Exchange  Council  met  at  1 :30  P.  M. 

Financial  statement  rendered  by  Exchange  Officer  and  pre- 
sented to  the  Exchange  Council  by  the  auditing  committee,  was 
accepted  by  the  council. 

Proceedings  of  this  board  were  accepted  and  ordered  re- 
corded in  the  exchange's  proceedings. 

A  motion  was  carried  to  declare  as  dividends  all  net  profits 
not  otherwise  provided  for  by  regulations,  nor  previously  pro- 
vided for  by  the  Exchange  Council,  and  to  be  distributed 
according  to  the  number  of  shares  held  by  each  member.  See 
Chapter  VI,  par.  269,  for  special  article  on  "Declaring  Divi- 
dends." 

Write  up  the  complete  proceedings  of  the  Exchange  Council. 
(Assume  all  members  of  council  present.) 

Append  extra  pages  of  general  ledger  ruling,  showing  dis- 
tribution of  net  profits  and  dividends,  as  follows: 

From  the  Profit  and  Loss  Account, 

To  the  Reserve  Fund  Account. 


118  A  MANUAL,  FOR  POST  EXCHANGES 

To  the  Surplus  Fund  Account. 

To  the  Regimental  Funds. 

To  the  Dividend  Account. 

To  other  funds,  such  as  Amusements  for  Enlisted  Men;  to 
cover  notes  payable  and  due  of  members. 

Note:  From  Oct.  1st,  the  exchange  is  open  and  in  operation, 
but  during  these  few  days  to  Oct.  5th,  it  is  only  desired  to  cover 
the  complete  adjustment  of  accounts  with  respect  to  the  Sep- 
tember dividend. 


CHAPTER  V 
SPECIAL  PROBLEMS 

1.     POSTING  DOUBLE  ENTRIES 

230.  To  know  at  once  to  what  accounts  to  post  the  entries 
of  any  commercial  transaction  requires  a  thorough  understand- 
ing of  the  nature  and  interrelation  of  all  accounts.  The  ac- 
counts of  a  business  are  all  coordinated.  In  so  far  as  the 
balance  of  the  whole  system  in  concerned,  any  debit  or  credit 
entry  of  one  account  is  just  as  important  as  the  debit  or  credit 
entry  of  any  other  account. 

The  exposition  of  double  entry  accounting  in  Chapter  II, 
may  not  have  succeeded  entirely  in  making  the  subject  perfectly 
plain  to  the  reader ;  but  if  Chapter  III  is  carefully  perused  and 
the  accounting  dispositions  of  each  entry  noted,  Chapter  II 
should  be  easily  understood  upon  reading  it  again.  Under  each 
account  in  double  entry  accounting  in  Chapter  II,  are  given 
the  more  common  entries  to  other  accounts  corresponding  to  the 
debit  and  credit  entries  of  that  account.  But  from  the  nature 
of  any  commercial  transaction,  the  bookkeeper  should  know  at 
once  to  what  accounts  the  entries  of  it  should  go. 

It  should  be  constantly  kept  in  mind  that  the  whole  theory  of 
double  entry  accounting  is  based  on  the  simple  proposition  that 
for  every  commercial  transaction  there  are  always  a  debit  and 
a  credit  entry.  The  two  entries  can  never  be  made  to  the  same 
account,  but  must  always  be  made  to  different  accounts.  The 
two  entries  are  always  equal  to  each  other.  Either  of  the 
entries,  however,  may  sometimes  be  split  and  have  its  different 
portions  posted  to  different  accounts.  For  example,  where  an 
account  payable  of  $100.00  is  paid  within  cash  discount  time 
at  3%  off,  only  $97.00  is  paid  to  the  creditor.  The  credit 
entry  is  represented  by  $97.00  posted  to  Cash  Account,  and 
$3.00,  to  the  Discount  Account — total  credit  entry  $100.00. 

On  the  other  hand,  the  combined  debit  or  credit  entries  of  an 
account  for  a  day,  week,  or  month,  may  be  entered  in  one  entry. 
Thus  the  Cash  Account  is  debited  at  the  close  of  each  day  with 


120  A  MANUAL  FOR  POST  EXCHANGES 

the  total  cash  sales  for  the  day.  Here  the  total  cash  sales  for 
the  day  represent  the  debit  entries  of  many  single  cash  transac- 
tions. 

231.  SYSTEMATIC     POSTING     OF     DOUBLE     EN- 
TRIES.    It  can  readily  be  seen  that  if  it  were  attempted  to 
post  both  entries  of  each  transaction,  as  it  presented  itself,  to 
the  different  accounts  to  which  they  belonged,  it  would  necessi- 
tate turning  to  these  accounts  in  immediate  succession.     If  the 
different   accounts   were   in   different   account   books,   as   they 
usually  are,  the  bookkeeper's  time  would  be  mostly  consumed 
with  the  handling   of   account   books.      To   overcome   such   a 
superfluous  handling  of  account  books,  a  systematic  method 
of  posting  entries  must  be  employed. 

For  posting,  either  only  one  entry  of  a  transaction  is  posted 
at  the  time,  the  other  being  posted  to  its  account  later ;  or  only 
a  record  of  the  transaction  is  made  at  the  time,  both  account- 
ing entries  being  posted  to  their  accounts  later  from  this  record. 

( 1 )  Whenever  one  of  the  entries  of  a  transaction  is  a  debit 
entry  to  the  Purchase  Account,  or  a  credit  entry  to  the  Sales 
Account,  or  either  a  debit  or  credit  entry  to  the  Cash  Account, 
such  entry  is  posted  directly  to  that  account,  the  other  entry 
being  posted  to  its  account  later,  as  will  be  explained  below. 

(2)  Whenever  neither  of  the  entries  of  a  transaction  is  a 
debit  entry  to  the  Purchase  Account,  or  a  credit  entry  to  the 
Sales  Account,  or  either  a  debit  or  credit  entry  to  the  Cash 
Account,  a  record  of  the  transaction  is  made  in  a  book  called 
the  Journal,  both  entries  of  the  transaction  being  posted  to 
their  respective  accounts  later  as  will  be  explained  below. 

232.  ORIGINAL  ENTRIES.     These  are  the  entries  speci- 
fied in  (1)  above: 

To  the  Purchase  Book :  Upon  opening  of  the  day's  mail,  all 
invoices  of  merchandise  purchases  received  will  be  sent  to  the 
bookkeeper  who  will  debit  the  Purchase  Account  with  the  sum  of 
each  invoice. 

To  the  Sales  Book :  At  the  close  of  the  day,  the  steward  will 
send  his  daily  report  of  sales  to  the  bookkeeper  who  will  credit 
the  total  of  sales  for  the  day  to  the  Sales  Account.  Separate 


SPECIAL  PROBLEMS  121 

entries  showing  the  totals  of  coupon,  credit,  and  cash  sales  may 
be  made  if  desired  by  providing  extra  columns ;  also,  the  total 
sales  of  each  sales  department. 

To  the  Cash  Book :  The  cash  receipts  of  a  post  exchange  are 
represented  by  (a)  cash  sales;  (b)  collections  from  enlisted  men 
on  pay  day;  (c)  cash  received  from  credit  accounts,  etc. 

(a)  The  total  of  cash  sales  as  shown  by  the  steward's  daily 
sales  report  is  debited  to  the  Cash  Account  at  the  close  of  each 
day. 

(b)  The   total   collection   from   the   enlisted   men   of   each 
company,  on  pay  day,  is  debited  to  the  Cash  Account  on  pay 
day.     Also  individual  collections  at  other  times. 

(c)  Each  cash  receipt  from  a  customer  in  payment  of  his 
credit  account  is  debited  to  the  Cash  Account  at  once. 

Any  other  cash  receipt  will  also  be  debited  to  the  Cash  Ac- 
count at  once. 

The  cash  expenditures  of  a  post  exchange  may  be  for  mer- 
chandise, expenses,  dividends,  etc.  In  any  case,  credit  Cash 
Account  with  each  expenditure.  It  is  possible  to  make  all 
cash  expenditures  by  checks  only  and  this  should  be  done.  In 
this  case,  the  exchange  officer  should  write  all  checks  for  ex- 
penditures at  one  time  each  day  if  possible  and  credit  them  at 
once  to  the  Cash  Account.  Should  the  exchange  officer  make 
expenditures  from  cash  on  hand,  he  must  either  post  the  same 
to  the  Cash  Account  at  once  or  make  a  memorandum  of  each 
expenditure  as  made,  posting  therefrom  to  the  Cash  Account 
later.  Trusting  to  memory  should  not  be  depended  upon. 

233.  JOURNAL  RECORD  ENTRIES.  These  are  the 
records  of  transaction  specified  in  (2)  above.  The  transac- 
tions of  which  record  entries  must  be  made  in  the  Journal  are : 

Merchandise  returned  to  us. 

Merchandise  returned  by  us. 

Notes  given  by  organizations  in  payment  of  capital  stock. 

Notes  given  by  post  exchange  in  buying  back  capital  stock. 

And  a  few  other  uncommon  transactions. 

These  transactions  are  evidenced  either  by  letters  or  notes 
received  or  sent,  at  which  time  they  are  immediately  sent  to  the 


122  A  MANUAL  FOR  POST  EXCHANGES 

bookkeeper,  who  makes  the  necessary  journal  record  entries. 
The  journal  entry  should  include:  (1)  the  date,  (2)  the 
account  or  accounts  to  be  debited  and  the  amount  or  amounts, 
(3)  the  account  or  accounts  to  be  credited  and  the  amount  or 
amounts,  and  (4)  an  explanation  of  the  transaction. 

The  explanation  should  be  concise  but  complete.  It  should 
enable  one  to  know  at  once  what  the  transaction  is  without  hav- 
ing to  refer  to  other  records.  There  are  several  forms  in  which 
a  journal  entry  can  be  made  of  which  the  following  is  the  more 
common : 

(Account  to  be  debited)  Dr.  (Concise,  but  complete  (Amount) 

To  (Account  to  be  credited)          Explanation.)  (Amount) 

The  following  form,  however,  is  more  used  by  large  business 
houses : 

(Amount)       (Account   to   be    debited)      Dr.    to    (Account  to  be. credited)       (Amount) 
(Concise,  but  complete  explanation i 

Formerly  it  was  thought  necessary  to  make  record  entries 
of  all  transactions  other  than  cash  transactions  to  the  Journal. 
The  present  method  of  making  original  entries  of  purchases 
and  sales,  as  explained  above,  has  resulted  in  greatly  reducing 
the  amount  of  posting  to  account  books  with  equal  efficiency 
and  much  more  simple  accounting. 

No  credit  columns  for  Bills  Receivable  and  Accounts  Pay- 
able, and  debit  columns  for  Accounts  Receivable  and  Bills  Pay- 
able are  provided  in  the  Journal  shown  in  Form  H;  for  journal 
record  entries  to  them,  where  sales  and  purchases  are  posted 
directly  to  their  respective  accounts,  are  very  seldom  if  ever 
made.  In  case  there  was  a  journal  record  entry  for  any  of 
these  missing  columns,  it  would  have  to  be  posted  in  the  General 
Ledger  columns. 

234.     POSTING  FROM   THE   PURCHASE   BOOK.     A 

regular  time  for  posting  the  second  entries  from  the  Purchase, 
Sales,  and  Cash  Books,  and  both  entries  from  the  Journal,  is 
reserved  each  day  or  week. 

The  accounts  which  have  their  credit  entries  corresponding 
to  debit  entries  in  the  Purchase  Account  are  Accounts  Payable. 


SPECIAL  PROBLEMS  123 

With  the  Purchase  Book  opened  and  on  the  desk  to  the  left, 
have  the  Accounts  Payable  Ledger  on  the  desk  to  the  right. 
Commencing  at  the  first  debit  entry  in  the  Purchase  Account, 
post  the  corresponding  credit  entry  in  its  Account  Payable  in 
the  Ledger,  posting  also  the  folio  of  the  Purchase  Book  in  the 
Ledger.  Also  post  the  folio  of  the  Ledger  containing  this 
Account  Payable,  in  the  Purchase  Book  opposite  this  entry,  so 
as  to  furnish  a  cross  reference  and  a  "check  off"  of  the  original 
entries  in  the  Purchase  Book  when  posted  to  the  Accounts  Pay- 
able Ledger. 

235.  POSTING  FROM  THE  SALES  BOOK.     The  ac- 
counts which  have  their  debit  entries  corresponding  to  credit 
entries  in  the  Sales  Account  are: 

The  Coupon  Account. 

The  Cash  Account. 

Accounts  Receivable. 

In  post  exchanges,  posting  from  the  Sales  Book  is  done  only 
once  a  month.  At  that  time  with  the  Sales  Book  to  the  left  and 
the  General  Ledger  to  the  right  and  opened  at  the  Coupon 
Account  page,  debit  Coupon  Account  with  the  total  coupon 
sales  for  the  month. 

The  debit  entries  to  the  Cash  Account  corresponding  to  the 
credit  entries  of  cash  sales  to  the  Sales  Account,  have  been 
posted  to  the  Cash  Account  each  day  as  original  entries. 

In  post  exchanges  the  Sales  Account  is  not  credited  with 
each  credit  sale,  but  only  with  the  total  of  such  sales  for  the 
day.  These  credit  sales  are  itemized  on  sales  slips  which  are 
filed  away.  At  the  end  of  the  month,  the  credit  sales  slips  of 
each  customer  are  added  together  and  a  statement  rendered  to 
him.  Before  rendering  these  statements,  they  are  sent  to  the 
bookkeeper  who  debits  the  several  Accounts  Receivable  with 
them.  At  the  same  time  he  adds  together  the  totals  of  all  of 
them,  and  the  aggregate  total  obtained  should  equal  the  total 
of  credit  sales  for  the  month,  as  shown  by  the  Sales  Book. 

236.  POSTING  FROM  THE  CASH  BOOK.     The  more 
common  accounts  which  have  their  credit  entries  corresponding 
to  debit  entries  in  the  Cash  Account  are : 


124  A  MANUAL  FOR  POST  EXCHANGES 

Accounts  Receivable. 

Bills  Receivable. 

On  the  day  before  the  date  specified  by  the  commanding 
officer  for  all  Accounts  Receivable  to  be  paid,  with  the  Cash 
Book  to  the  left  and  the  Accounts  Receivable  Ledger  to  the 
right,  commence  at  the  first  cash  receipt  and  for  each  cash 
receipt  from  an  account  receivable,  credit  its  Account  Receiv- 
able in  the  Ledger.  The  folio  of  the  Accounts  Receivable 
Ledger  which  is  entered  in  the  Cash  Book  furnishes  a  check 
on  the  posting. 

Change  the  Accounts  Receivable  Ledger  for  the  Bills  Re- 
ceivable Ledger,  and  credit  each  organization  therein  with  the 
total  collection  from  the  enlisted  men  of  it  on  pay  day,  as 
shown  by  the  Cash  Book. 

Any  other  account  which  has  a  credit  entry  corresponding 
to  a  debit  entry  in  the  Cash  Account  is  similarly  posted. 

The  more  common  accounts,  having  their  debit  entries  corre- 
sponding to  credit  entries  in  the  Cash  Account,  are: 

Accounts  Payable. 

Expense  Accounts,  etc. 

With  the  Cash  Book  to  the  left  and  Accounts  Payable  Ledger, 
Expense  Book,  or  other  account  book,  placed  to  the  right, 
similarly  post  from  the  Cash  Account  to  the  Accounts  Payable, 
Expense  Account,  etc. 

237.  POSTING  FROM  THE  JOURNAL.  For  con- 
venience in  posting,  the  Journal  is  usually  furnished  with  "Dr." 
columns  for  Bills  Receivable  and  Accounts  Payable,  and  "Cr." 
columns  for  Accounts  Receivable  and  Bills  Payable,  in  addition 
to  the  regular  "Dr."  and  "Cr."  column,  usually  headed  "General 
Ledger." 

With  the  Journal  to  the  left  and  the  Bills  Receivable,  Ac- 
counts Payable,  Accounts  Receivable,  and  Bills  Payable 
Ledgers  to  the  right  in  turn,  post  all  the  entries  from  their 
respective  four  columns  in  the  Journal  to  their  proper  accounts 
in  the  Ledgers.  Lastly,  place  the  General  Ledger  to  the  right, 
and  post  all  journal  entries  in  the  "Dr.  General  Ledger"  column 


Date 


Cash 


Coupon 


Credit 


Total 


Restau- 
rant 
Dept. 


Form  F,  SALES  BOOK 


Grocery 
Dept. 


Miscel- 
laneous 
Dept. 


Date 

Name 

F 

Invoice 

Freight 

1 

Total 

Restau- 
rant 
Dept. 

Grocery 
Dept. 

Miscel- 
laneous 
Dept. 

. 



Form  G,  PURCHASE  BOOK 


126  A  MANUAL  FOE.  POST  EXCHANGES 

to  their  proper  accounts  in  the  General  Ledger;  then  all 
journal  entries  in  the  "Cr.  General  Ledger"  column  to  their 
proper  accounts  in  the  General  Ledger. 

Where  no  separate  columns  are  provided  in  the  Journal  for 
accounts  usually  carried  in  the  General  Ledger,  or  for  accounts 
carried  in  separate  account  books,  journal  entries  for  such 
account  will  have  to  be  made  in  the  General  Ledger  columns. 
In  such  cases,  the  posting  of  entries  to  them  from  the  Journal 
is  made  in  the  same  manner  as  described  in  the  preceding  para- 
graph. 

2.     ACCOUNT  BOOKS 

238.  The  forms  and  rulings  of  account  books  should  be 
entirely  based  upon  convenience  and  simplicity  in  accounting. 
Rulings   specially  adapted  to  certain  accounts  are  often  not 
suitable  for  other  accounts.     The  amount   and  character  of 
business  will  vary  the  ruling  of  the  account  books   for  some 
accounts. 

239.  INVOICES  RECEIVED  BOOK.     Formerly,  each  in- 
voice of  merchandise  received  was  copied  in  the  same  itemized 
form  in  a  Day  Book,  usually  designated  the  Invoices  Received 
Book.     Now  the  invoices  received  are  generally  either  bound 
into  a  book  form  or  filed  away.     The  lack  of  a  uniformity  of 
sizes  for  invoices  renders  a  bound  volume  of  them  difficult  to 
handle.     Each  invoice  of  merchandise  bought  is  debited  to  the 
Purchase  Account. 

240.  INVOICES  SENT  BOOK.     Invoices  sent  are  never 
itemized  in  the  Day  Book  any  more.     The  typewriter  enables 
carbon  copies  to  be  easily  made  at  the  same  time  as  the  original. 
These  copies,  for  any  firm,  are  all  of  the  same  size,  and  when 
bound  form  a  neat  volume.     Each  invoice  of  merchandise  sold 
is  credited  to  the  Sales  Account. 

241.  THE  CASH- JOURNAL.     The  general  practice  now 
is  to  join  the  Cash  Book  and  Journal  in  one  account  book  called 
the  Cash-Journal,  as  shown  in  Form  I.     In  this  illustration 
special  columns  are  provided  for  a  few  accounts  having  many 
entries,  such  as  the  Expense  and  Discount  Accounts,  and  where 


SPECIAL  PROBLEMS  127 

these  accounts  are  so  kept  only  controlling  accounts  of  them 
need  be  kept  in  the  General  Ledger.  Any  number  of  accounts 
may  be  kept  in  the  Cash  Journal  according  to  the  number  of 
columns  provided.  The  illustration  shown  in  Form  I  is  so 
arranged  that  the  total  of  all  the  debit  columns  equals  the  total 
of  all  the  credit  columns. 

242.  CASH-MERCHANDISE-JOURNAL.        Where      a 
debit  column  is  provided  in  the  Cash-Journal  for  "purchases" 
and  a  credit  column  for  "sales,"  it  becomes  a  Cash-Merchandise- 
Journal,  and  it  possesses  the  advantage  that  it  contains  all 
original  and  record  entries  of  a  business.     In  most  businesses 
it  is  more  desirable  to  keep  the  Purchase  and  Sales  Accounts 
in  separate  account  books  so  that  the  purchases  for  and  sales 
by  departments  may  be  shown.     To  make  this  book  complete 
for  original  and  record  entries  it  would  have  to  include  a  credit 
column  for  the  Coupon  Account,  but  this   account  must  be 
kept  in  a  separate  account  book  so  that  the  coupon  issues  to 
the  enlisted  men  of  each  organization  can  be  shown. 

243.  GENERAL  LEDGER.     The  ruling  of  the  regular 
ledger  book  is  common  to  all.     It  is  not  absolutely  necessary  to 
have  any  other  account  book  than  the  Ledger,  for  its  ruling  may 
be  used  for  any  account ;  and  this  would  be  entirely  practicable 
in  a  small  business.     But  it  is  more  convenient  even  in  small 
businesses  to  have  separate  account  books  for  the  Cash,  Pur- 
chase, and  Sales  Accounts,  and  in  post  exchanges,  the  Coupon 
Account. 

244.  BALANCE     LEDGERS.     Ledgers    which    have    a 
special  column  for  balances  are  called  Balance  Ledgers.     The 
following  accounts  are  usually  kept  in  Balance  Ledgers,  their 
controlling  accounts  being  kept  in  tabular  form  arranged  by 
names  either  in  the  General  Ledger  or  on  pages  reserved  in  the 
Balance  Ledger  for  them: 


<u  <u 
O  J 


M  g 


I 


O 

a 

s 

O 


|| 

R-™  ||  Accounts! 

Discount  I]  Receivablej 

||  Cash  Bank 
Date  and  Name  F  Expendi-  With- 
tures  drawals 

n  I,  CASH-JOURNAL 

f  !|                      S 

^a 

n 

MA 

l| 

Operating 
Expenses 

Accounts 
Payable 

"S      0 

V     00 

si 

: 

§ 

U 


Date 

F 

Debit 

Balance 

Credit 

F 

Date 

Form  K,  BALANCE  LEDGER 


Date 

Name 

Name 

Name 

Name 

Name 

Name 

Name 

Name 

Total 

Form  L,  COLUMNAR  LEDGER 


Names 


F       1-31-16     2-29-16     3-31-16     4-30-16     5-31-16     6-30-16 


Form  M,  TABULAR  LEDGER 


SPECIAL  PROBLEMS  131 

Accounts  Receivable. 

Accounts  Payable. 

Bills  Receivable. 

Bills  Payable. 

Where  Accounts  Receivable  are  kept  in  a  special  ledger,  such 
ledger  is  usually  called  the  Sales  or  Customers'  Ledger;  and 
where  Accounts  Payable  are  kept  in  a  special  ledger,  such 
ledger  is  usually  called  the  Purchase  or  Creditors'  Ledger. 

The  advantages  of  the  Balance  Ledger  for  the  above  accounts 
are  very  apparent. 

245.  COLUMNAR  LEDGERS.     A  Columnar  Ledger  is 
one  which  has  columns   ruled   for  each  account,  personal  or 
impersonal.     If  entries  to  it  are  to  be  by  day,  it  should  have 
at  least  33  horizontal  lines — one  for  each  day  of  the  month, 
and  two  or  three  for  totals.     The  Sales  Account  and  Coupon 
Account   are  kept  in   columnar  ledgers   called   the   Sales   and 
Coupon  Books,  respectively. 

246.  TABULAR  LEDGERS.     A  Tabular  Ledger  is  one 
in  which  the  accounts  occupy  horizontal  lines,  the  names  of  the 
account  being  arranged  on   the  left  of  the  account  page  in 
alphabetical  or  numerical  order.     Columns  are  arranged  to  the 
right,  one  for  each  date.      See  Form  M.     Accounts  and  Bills 
Receivable  and  Payable  Controlling  Accounts  are  often  kept 
in  Tabular  Ledgers. 

247.  LOOSE,  LEAF  LEDGERS.     Ledgers  with  detach- 
able leaves  bound  in  a  cover  with  locking  device,  so  that  when 
the  binding  is  unlocked,  the  leaves  may  be  removed,  are  called 
Loose  Leaf  Ledgers.     The  ruling  may  be  the  regular,  balance, 
columnar,  or  tabular  form.     The  Loose  Leaf  Ledger  is  much 
better    suited    for    some    accounts    than    the    bound    ledgers, 
especially  for  personal  accounts,  as  any  dead  account  may  be 
removed  at   any   time   and   the  live   accounts   can  be  kept  in 
alphabetical  order. 

248.  SPECIAL   LEDGERS.     The   term    Special   Ledger 
is  used  for  any  Ledger  other  than  the  General  Ledger.     In?. 
addition  to  the  accounts  enumerated  in  the  immediately  pre/- 


132  A  MANUAL  FOR,  POST  EXCHANGES 

ceding  paragraphs,  special  ledgers  may  be  provided   for  the 
Expense,  Revenue,  and  Discount  Accounts. 

3.     CHANGING  FROM  SINGLE  TO  DOUBLE  ENTRY  ACCOUNTING 

249.  In  single  entry  accounting,  or  bookkeeping,  accounts 
for  assets  and  liabilities  are  carried,  but  in  no  balanced  system. 
If  there  are  some  assets  and  liabilities  for  which  there  are  no 
accounts  kept,  an  inventory  of  such  assets  and  liabilities  must 
be   taken   and   an   account   opened   for   each   kind,   to   change 
from   single   to   double   entry   accounting.      In   order   to  make 
this    systematic,    all    the    accounts    necessary    to    cover    the 
business    are    opened,    except    an    account    for    capital    stock. 
A  complete  inventory  is  then  taken  of  the  whole  business  in- 
cluding all  assets  and  liabilities,  and  the  several  accounts  are 
debited  and  credited  respectively,  with  the  same.    Each  account 
is  then  balanced.     All  debit  balances  (which  represent  assets) 
are  placed  in  one  column,  and  all  credit  balances  (which  repre- 
sent liabilities)    are  placed  in  another  column.      The  sum  of 
each   column   is   then    obtained,    and   the   excess    of   the   debit 
balances  over  the  credit  balance  is  the  excess  of  assets  over 
liabilities  and  represents  the  capital  stock  of  the  business.     A 
Capital  Stock  Account  is  then  opened  to  which  is  credited  this 
difference.     A  balanced  system  of  accounts  is  thereby  effected 
and  from  then  on  all  accounts  are  ready  for  the  double  entry 
of  commercial  transactions. 

4.     STOCK  ACCOUNTING 

250.  By  "stock  accounting"  is  meant  the  accounting  of  the 
merchandise  on  hand  in  a  systematic  and  logical  manner.     As 
usually  kept  in  small  businesses,  the  Merchandise  Account  is 
debited  with  the  merchandise  on  hand  per  inventory  at  the  be- 
ginning  of   the   month,   and   the   purchases   made   during   the 
month;  and  credited  with  the  sales  during  the  month  and  mer- 
chandise on  hand  per  inventory  at  the  end  of  the  month,  the 
debit  balance  representing  the  gross  profit  of  the  business  for 
the  month. 


SPECIAL  PROBLEMS  133 

This  method  is  very  defective  in  that  there  are  no  checks  by 
means  of  which  it  can  be  determined  (1)  whether  any  mer- 
chandise has  been  lost  or  stolen,  and  (2)  whether  all  cash  sales 
have  been  turned  in.  Of  course,  the  manager  from  his  knowl- 
edge of  the  merchandise  on  hand  at  the  beginning  of  the  month 
and  the  amount  of  purchases  during  the  month  and  the  mer- 
chandise on  hand  at  the  end  of  the  month,  would  have  a  good 
idea  as  to  what  the  amount  of  sales  and  gross  profit  should  be, 
and  should  be  able  to  detect  any  large  loss.  He  would  not, 
however,  have  definite  knowledge  or  data  by  which  he  could 
detect  the  shortage.  Any  discoveries  on  his  part  would  be  an 
incidental  result  of  a  close  supervision,  which  would  be  possible 
only  in  a  small  business  where  the  number  of  employees  is  small. 
In  large  businesses,  where  the  number  of  employees  is  large, 
responsibility  is  distributed,  and  close  supervision  is  difficult,  a 
more  accurate  method  of  merchandise  accounting  is  necessary. 

This  is  accomplished  as  follows : 

First,  A  storekeeper  is  responsible  for  all  merchandise  from 
the  time  of  its  receipt  to  the  time  of  its  issue  to  a  sales  depart- 
ment. 

Second,  The  sales  clerk  (or  chief)  of  a  sales  department  is 
responsible  for  all  merchandise  in  his  department  from  the 
time  of  its  issue  to  him  until  a  cash  or  credit  equivalent  for  it 
is  turned  in  to  the  office. 

251.  STOREROOM  STOCK  ACCOUNTING.  An  item- 
ized bill  always  accompanies  a  consignment  of  merchandise. 
Upon  the  receipt  of  a  bill  for  merchandise  purchased,  the  mail 
clerk  sends  it  at  once  to  the  bookkeeper,  who  debits  the  Pur- 
chase Account  (Purchase  Book)  with  the  same.  It  is  then  sent 
to  the  storekeeper  who  checks  the  merchandise  received  in  the 
shipment  off  from  the  bill.  Should  there  be  a  shortage,  or 
merchandise  spoiled,  or  merchandise  of  inferior  quality,  he 
makes  out  an  itemized  memorandum  on  a  prescribed  form 
(Form  C)  of  such  merchandise  and  sends  it  at  once  to  the 
office  and  the  proper  executive  officer  of  the  business  (Exchange, 
Officer)  verifies  the  shortage  or  other  claim.  A  claim  is  thenj 


134  A  MANUAL  FOR  POST  EXCHANGES 

made  to  the  creditor.  All  items  as  checked  are  posted  to  their 
respective  stock  accounts. 

252.  MERCHANDISE    STOCK    ACCOUNTS.     In    the 

office  accounts  for  each  article  of  merchandise  kept  for  sale  are 
kept  on  "3  x  5"  account  cards,  which  are  classified  alphabetically 
according  to  the  kind  of  merchandise.  This  stock  account  is 
debited  with  all  quantities  of  the  article  of  merchandise  re- 
ceived, and  credited  with  all  quantities  of  it  issued  to  sales 
departments  on  receipted  "issue"  blanks,  which  are  made  in 
triplicate,  the  original  being  sent  to  the  office,  one  being  kept 
by  the  storekeeper  as  a  voucher  for  the  issue,  and  the  other 
being  given  to  the  sales  clerk.  The  balance  on  any  stock 
account  card  shows  the  quantity  of  the  article  which  it  repre- 
sents that  should  be  on  hand  in  the  storeroom,  and  this  balance 
should  check  with  an  inventory  of  that  article  made  at  any 
time.  If  there  should  be  a  shortage  of  the  article  on  hand,  it 
can  be  detected  and  the  storekeeper  held  responsible  unless  evi- 
dence shows  that  such  shortage  was  due  to  some  cause  beyond 
the  storekeeper's  control.  As  a  result,  the  storekeeper  will 
always  keep  a  close  check  on  the  merchandise  on  hand  and 
report  at  once  any  shortage. 

253.  MERCHANDISE      DESTROYED.        Merchandise 
that  is  unsaleable  and  worthless,  is  destroyed  in  the  presence 
of  the  exchange  officer.     The  storekeeper  makes  an  itemized  list 
(Form  C)   of  such  merchandise  and  hands  it  to  the  exchange 
officer,  who  inspects  the  merchandise,  checks  off  the  same  on  the 
itemized  list,  and  after  witnessing  its  destruction  signs  the  list. 
From  this  list   the  bookkeeper   credits   each   individual   stock 
account  with  the  amount  of  its  merchandise  destroyed.     The 
list  is  then  turned  over  to  the  storekeeper  who  keeps  it  as  a 
voucher  for  the  merchandise  destroyed. 

254.  SHORTAGES.      Whenever   there   develops   a   short- 
age in  merchandise,  as  through  theft,  fire,  etc.,  an  itemized  list 
of  the  shortage  is  presented  to  the  exchange  officer  who  im- 
mediately investigates   the  shortage.      The  finding  is  used  as 
a  voucher  for  crediting  the  individual  stock  accounts. 


Name  of  Article                                          Class                                          Department 

Date 
Received 

Bill 

No. 

Unit 
C.  P. 

Unit 
S.  P. 

Quantity 
Received 

Balance 

Quantity 
Issued 

You. 

No. 

Date 
Issued 

Form  N.  MERCHANDISE  STOCK  ACCOUNT  CARD* 

'The  merchandise  stock  accounts  can  be  conveniently  kept  on  Q.   M.  C.  form  200. 


Name  of  Article 

C.  K. 

Number 

Unit 

Unit 
C.  P. 

Cost 
Value 

Unit 
S.  P. 

'Selling 
Value 

Form  O,  INVENTORY  BOOK 

'The  selling  price  is  included  only  in  inventories  of  sales  department. 


Date 


Issues 


Issue 
Vo. 


Value 
(S.  P.) 


Balance 


Amount 


S.  B. 


Sales 


Date 


Form  P,  SALES  DEPARTMENT  STOCK  ACCOUNT 


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138  A  MANUAL,  FOR  POST  EXCHANGES 

255.  SALES  DEPARTMENT  STOCK  ACCOUNTING. 

A  separate  stock  account  for  each  sales  department  is  kept  by 
the  bookkeeper  to  which  is  debited  the  amount  and  value  of  all 
merchandise  on  hand  in  that  department  at  the  beginning  of 
the  month  and  the  amount  and  value  of  all  merchandise  issued 
to  it  during  the  month — all  at  selling  price;  and  to  which  are 
credited  all  cash,  coupon,  and  credit  sales  made  in  that  depart- 
ment as  shown  by  the  Steward's  daily  report  of  sales ;  the 
balance  of  this  account  at  any  time  represents  the  value  of 
merchandise  (at  selling  price)  on  hand  in  that  department  at 
that  time,  and  this  balance  should  check  with  an  inventory  (at 
selling  price)  of  the  merchandise  of  that  department  at  that 
time.  If  so  kept,  any  shortage,  loss,  or  sales  not  reported, 
etc.,  can  be  quickly  detected  and  responsibility  fixed. 

256.  ISSUES    OF   MERCHANDISE    TO    SALES   DE- 
PARTMENTS.    Whenever    a    sales    department    needs    any 
merchandise,  its  sales  clerk  makes  a  requisition  on  the  store- 
keeper.    The  storekeeper  then  itemizes  such  articles  called  for 
that  he  has  on  hand,  on  an  issue  slip  (Form  Q),*  which  he  makes 
out  in  triplicate  and  has  the  sales  clerk  to  sign.     The  original 
is  retained  by  the  storekeeper,  who  credits  the  individual  stock 
accounts  for  the  quantity  of  each  article  issued;    one  copy  is 
sent  to  the  bookkeeper  who  debits  the  sales  department  for  the 
value  (at  selling  price)  of  the  merchandise  issued  to  it;   and  the 
other  copy  is  given  to  the  sales  clerk. 

257.  RECORD     OF     SALES.     Each     sales     department 
usually  has  a  cash  register,  unless,  as  in  case  of  large  exchanges, 
a  cashier  is  employed  who  receives  all  cash  and  makes  change. 

In  the  first  case,  all  sales,  whether  cash,  credit,  or  coupon, 
are  registered  when  made.  Credit  sales  should  be  itemized  on 
duplicating  sales  pad:  the  copy  is  detached  and  given  to  the 
customer;  the  original  is  retained  and  turned  in  to  the  office. 
The  sales  clerk  is  usually  required  to  keep  a  tabular  sales  sheet 
to  which  is  debited  the  total  value  of  each  sale  as  it  is  made. 
At  the  close  of  business  each  day,  the  steward  collects  the  cash, 

*Or  Form  A. 


SPECIAL  PROBLEMS  139 

coupon,  and  credit  sales  slips  from  each  sales  department,  giv- 
ing the  sales  clerks  receipts  for  the  same.  These  he  combines 
to  make  his  steward's  daily  report  of  sales,  required  by  regula- 
tions, and  posts  the  same  in  the  exchange  building.  It  is  well 
for  the  sales  clerk  to  compare  the  figures  on  this  report  with 
those  on  their  receipts  so  as  to  detect  any  mistake. 

In  the  second  case,  where  a  cashier  is  employed,  the  sales 
clerk  makes  out  a  duplicate  sales  slip  for  each  sale — whether 
cash,  coupon,  or  credit.  In  credit  sales  the  original  sales  slip, 
signed  by  the  customer,  is  sent  to  the  cashier  and  the  copy  is 
given  to  the  customer.  In  cash  and  coupon  sales,  the  cash  or 
coupons  are  sent  to  the  cashier  with  the  copy  of  the  sales  slip, 
and  the  original  is  given  to  the  customer.  At  the  same  time 
the  sales  clerk  debits  his  general  sales  sheet  with  the  number  of 
the  sale  and  its  total  value. 

In  either  case  the  steward  or  cashier,  as  the  case  may  be, 
turns  the  original  credit  sales  slips  and  copies  of  cash  and 
coupon  sales  slip  over  to  the  bookkeeper  to  enable  him  to  credit 
the  proper  sales  department  stock  accounts  with  the  value  of 
the  same. 

5.     TRIAL,  BALANCES 

258.  A  Trial  Balance  is  a  general  balance  taken  of  all 
the  accounts  of  a  business  to  determine  their  accuracy.  Only 
the  balance  of  each  account  is  represented  in  this  general 
balance.  For  greater  convenience  where  there  is  a  large  num- 
ber of  accounts  of  the  same  kind,  as  personal  accounts,  etc.,  a 
tabular  summary  of  the  balances  of  such  accounts  is  made  and 
only  the  aggregate  sum  of  all  the  balances  of  such  accounts  is 
entered  in  the  Trial  Balance,  under  the  caption  of  Accounts 
Receivable  Account,  etc. 

From  the  definition  of  double  entry  accounting,  that  for 
every  debit  entry  to  any  account  there  must  be  an  opposite 
credit  entry  to  some  other  account,  it  is  at  once  evident  that 
if  all  double  entries  of  transactions  have  been  made,  the  com- 
bined sum  of  all  debit  entries  to  all  accounts  should  be  equal 
to  the  combined  credit  entries  to  all  accounts.  Or,  what 


140  A  MANUAL,  FOR  POST  EXCHANGES 

amounts  to  the  same,  the  total  of  debit  balances  must  equal  the 
total  of  credit  balances. 

If  the  Trial  Balance  does  not  balance,  it  will  be  due  to  one  or 
more  of  the  following  causes : 

(1)  An  error  in  the  Trial  Balance  itself;  such  as,  an  omis- 
sion of  one  or  more  accounts,  an  insertion  of  a  previously  ruled 
off  account,  a  mistake  in  posting  one  or  more  accounts,  or  a 
mistake  in  addition. 

(2)  An  error  in  one  or  more  accounts  ;   such  as,  an  omission 
of  one  or  more  entries,  a  mistake  in  posting  some  entry,  or  a  mis- 
take in  addition. 

259.  DETECTION  OF  ERRORS  IN  TRIAL  BAL- 
ANCES. Where  the  Trial  Balance  does  not  balance,  a  syste- 
matic analysis,  or  diagnosis  so  to  speak,  should  be  made,  other- 
wise the  bookkeeper  will  flounder  in  the  dark,  detecting  the 
error  if  at  all  only  by  accident. 

NORMAL  PROCEDURE:  (1)  Re-add  the  credit  and 
debit  columns  of  the  Trial  Balance. 

(2)  Check  the  balance  of  each  account  as   shown  in  the 
Trial  Balance  with  the  balance  as  shown  in  its  account,  to  see 
if  the  balances  in  both  places  are  exactly  the  same.     Often  a 
mistake  in  posting  a  number  is  made  by  reversing  the  order 
of  two  adjacent  digits  (transposition),  or  by  posting  a  num- 
ber in  a  higher  or  lower  order  (slide). 

(3)  Run  through  all  the  account  books  checking  each  one 
off  that  appears  in  the  Trial  Balance  to  see  if  some  account 
may  not  have  been  omitted  from  the  trial  balance.     Also  check 
personal  accounts  with  their  controlling  account  to  see  if  some 
account  may  not  have  been  omitted  from  its  controlling  ac- 
count.     Often  an  account  balanced  and  closed  at  a  previous 
trial  balance  has  not  been  ruled  off  and  is  included  in  the  present 
Trial  Balance  through  oversight. 

(4)  Re-add  the  debit  and  credit  columns  of  all  accounts. 

(5)  Check   the   record   entries   in   the   Journal   with   both 
their  double  accounting  entries  in  their  respective  accounts,  to 
see  if   one  may  not  have  been  omitted ;  check  off  with  red  pencil 


SPECIAL,  PROBLEMS  141 

each  debit  entry  in  the  accounts  of  original  entry  (the  Cash, 
Purchase,  Sales,  and  Coupon  Accounts)  with  its  corresponding 
credit  entry  in  some  other  account,  to  see  if  the  credit  entry 
has  been  posted  and,  if  so,  correctly. 

(6)  Check  off  with  blue  pencil  each  credit  entry  in  the 
accounts  of  original  entry  with  its  corresponding  debit  entry 
in  some  other  account,  to  see  if  the  debit  entry  has  been  posted 
and,  if  so,  correctly.  If  there  has  been  an  omission  of  a  credit 
entry,  it  will  be  detected  in  the  fifth  step,  but  the  omission  of  a 
debit  entry  will  not  be  detected  until  the  sixth  test  is  applied. 

SPECIAL  PROCEDURE:  If  the  bookkeeper  has  a  good 
"hunch"  as  to  the  source  or  probable  source  of  the  error,  he 
may  investigate  such  source  at  once  before  attempting  the 
normal  procedure  outlined  above. 

260.  SPECIAL  AIDS  TO  THE  DETECTIONS  OF 
ERRORS.  The  following  aids  will  often  give  the  accountant 
a  "hunch"  as  to  where  the  error  is,  in  case  he  has  kept  the 
account  books  carefully. 

(1)  Where  the  difference  between  the  credit  column  and 
debit  column  is  Ic,  lOc,  $1.00,  etc.,  the  error  is  almost  certain 
to  be  in  an  addition  either  in  the  Trial  Balance,  or  in  some 
account  represented  in  the  Trial  Balance. 

(2)  Where  the  difference  is  an  even  number,  the  error  may 
be  due  to  some  debit  entry  being  posted  on  the  credit  side  of 
an  account,  or  vice  versa. 

(3)  Where  the  difference  is  divisible  by  nine,  the  error  is 
probably  due  to  a  transposition  or  a  slide  in  posting  some  entry. 
E.  g.,  an  expense  bill  might  have  been  credited  to  the  Cash 
Account  as  $12.00,  its  true  value,  but  in  debiting  the  Expense 
Account  it  is  posted  as  $21.00.     Here  the  difference  ($21-$12) 
is  divisible  by  9,  and  is  due  to  a  transposition  of  the  1  and  2 
in  debiting  the  Expense  Account. 

(4)  Where  the  difference  is  divisible  by  99,  the  error  is 
probably  due  to  a  double  slide  in  posting  one  entry.     E.  g., 
$44.55  -f-  9  =  495  -=-  11  =  =  45.     In  this  case  look  for  45c 
posted  for  $45.00,  and  vice  versa. 


142  A  MANUAL  FOR  POST  EXCHANGES 

(5)  Where  the  difference  is  9c,  12c  may  have  been  posted 
as  21c;  23c  as  32c;  34c  as  43c;  45c  as  54c;  67c  as  76c;  78c  as 
87c;  89c  as  98c,  or  vice  versa.  If  90,  $1.20  as  $2.10,  or  vice 
versa,  and  so  on.  If  $9.00,  $12.00  as  $21.00,  or  vice  versa,  and 
so  on. 

Where  the  difference  is  18c,  13c  may  have  been  posted  as  31c  ; 
24c  as  42c ;  35c  as  53c ;  46c  as  64c ;  57c  as  75c ;  68c  as  86c ;  79c 
as  97c;  or  vice  verse.  If  $1.80,  $1.30  as  $3.10,  or  vice  versa, 
and  so  on.  If  $18.00,  $13.00  as  $31.00,  or  vice  versa,  and  so  on. 

Where  the  difference  is  27c,  14c  may  have  been  posted  as 
41c;  25c  as  52c ;  36c  as  63c;  47c  as  74c ;  58c  as  85c;  69c  as 
96c,  or  vice  versa.  If  $2.70,  $1.40  as  $4.10,  or  vice  versa,  and 
so  on.  If  $27.00,  $14.00  as  $41.00,  or  vice  versa,  and  so  on. 

Where  the  difference  is  36c,  15c  may  have  been  posted  as 
51c;  26c  as  62c;  37c  as  73c;  48c  as  84c;  59c  as  95c,  or  vice 
versa.  If  $3.60,  $1.50  as  $5.10,  or  vice  versa,  and  so  on.  If 
$36.00,  $15.00  as  $51.00,  or  vice  versa,  and  so  on. 

Where  the  difference  is  45c,  16c  may  have  been  posted  as  61c ; 
27c  as  72c ;  38c  as  83c ;  49c  as  94c,  or  vice  versa.  If  $4.50, 
$1.60  as  $6.10,  or  vice  versa,  and  so  on.  If  $45.00,  $16.00  as 
$61.00,  or  vice  versa,  and  so  on. 

Where  the  difference  is  54c,  17c  as  71c;  28c  as  82c;  39c  as 
93c,  or  vice  versa.  If  $5.40,  $1.70  as  $7.10,  or  vice  versa,  and 
so  on.  If  $54.00,  $17.00  as  $71.00,  or  vice  versa,  and  so  on. 

Where  the  difference  is  63c,  18c  may  have  been  posted  as 
81c;  19c  as  91c,  or  vice  versa.  If  $6.30,  $1.80  as  $8.10,  or 
vice  versa,  and  so  on.  If  $63.00,  $18.00  as  $81.00,  or  vice 
versa,  and  so  on. 

Where  the  difference  is  72c,  19c  may  have  been  posted  as 
91c,  or  vice  versa.  If  $7.20,  $1.90  as  $9.10,  or  vice  versa.  If 
$72.00,  $19.00  as  $91.00,  or  vice  versa. 

It  will  be  noticed  that  the  above  conditional  differences  are 
all  multiples  of  9. 

It  will  also  be  observed  that  the  transposition  of  two  figures 
in  any  number  will  produce  the  same  conditions  as  outlined 
above.  Thus,  $275.12  posted  as  $257.12  gives  a  difference  of 
$18.00.  Therefore,  look  for  the  units  and  tens  digits  to  be 
transposed  in  some  entry. 


SPECIAL,  PROBLEMS  143 

To  apply  any  of  the  tests  given  in  (3),  (4),  and  (5)  to 
every  entry,  for  the  tests  do  not  indicate  any  specific  entry, 
would  be  as  laborious  as  the  normal  procedure  outlined  above. 
The  conditional  differences,  however,  would  indicate  as  to 
whether  the  error  in  all  probabilities  were  due  to  a  slide  or 
transposition  and  also  in  what  digits  the  error  took  place,  so 
that  the  bookkeeper  in  checking  the  debit  with  the  credit  entries 
in  the  normal  procedure  would  be  on  a  special  lookout  for  such 
transposition  or  slide,  even  though  it  gave  him  no  immediate 
clue  to  the  source  of  the  error. 

6.     FINANCIAL  STATEMENTS 

261.  In  order  to  present  a  comprehensive  and  intelligent 
summary  of  a  business,  a  financial  statement  is  prepared  at  the 
end  of  each  month,  quarter,  or  year.    It  is  sometimes  designated 
as  the  monthly,  quarterly,  or  annual  statement.     This  state- 
ment consists  of  (1)  the  Trial  Balance,  (2)  the  Trading  (or 
Merchandise)  Account,  (3)  the  Profit  and  Loss  Account,  and 
(4)  the  Balance  Sheet. 

262.  THE    TRIAL   BALANCE.     In    Chapter   III,   par. 
192,  the  Trial  Balance  is  included  in  the  proceedings  of  the 
exchange  council  under  the  caption  of  "Trial  Balance,  August 
31,  1915."    It  will  be  noted  that  this  Trial  Balance  is  just  the 
same  as  that  shown  on  page  99  of  the  General  Ledger  from  which 
it  is  copied.    The  taking  of  trial  balances  is  thoroughly  covered 
in  Chapter  11,  par.  103,  and  in  section  5  of  this  chapter. 

263.  THE     TRADING    ACCOUNT.     This     account    is 
included  in  the  Financial  Statement  to  show  the  gross  profit  of  a 
business.     It  shows  the  merchandise  on  hand  at  the  beginning 
of  the  month,  the  balances  of  the  Purchase  and  Sales  Accounts, 
the  merchandise  on  hand  at  the  end  of  the  month,  and  the  gross 
profit,  all  of  which  are  essential  to  a  general  and  intelligent 
conception  of  the   conduct  and   success   of  a  business.      This 
account  is  sometimes  carried  under  the  caption  of  "Merchan- 
dise Account." 

264.  THE  PROFIT  AND  LOSS  ACCOUNT.     This  ac- 
count is  included  in  the  Financial  Statement  to  show  the  net 


144  A  MANUAL  FOR  POST  EXCHANGES 

profit  (or  loss)  of  a  business.  To  it  are  credited  gross  profit, 
revenues,  discounts,  etc.,  and  to  it  are  debited  all  expense 
balances,  etc.  The  balance  of  this  account  represents  the  net 
profit  (or  loss)  of  the  business  for  the  period  of  the  financial 
statement.  See  pars.  190  and  192. 

265.  THE  BALANCE  SHEET.     This  sheet  is  made  from 
the  Trial  Balance  and  the  preceding  account,  and  in  it  are 
carried  all  accounts  balanced  but  not  closed,  i.  e.,  the  accounts 
which  represent   the  "assets"   and  "liabilities"   of   a  business. 
Purchase,  Sales,  Expense  and  Revenue  Accounts  are  balanced 
and  closed  at  the  taking  of  a  Trial  Balance,  their  balances  being 
disposed  of  for  good  in  the  Trading  and  Profit  and  Loss  Ac- 
counts.    It  will  be  noticed  that  all  balances  shown  in  the  Trial 
Balance  are  also  posted  either  to  the  Trading,  Profit  and  Loss 
Account,  or  Balance  Sheet,  but  no  balance  is  posted  to  more 
than  one  of  the  latter.     In  other  words  all  balances  in  the  Trial 
Balance  not  posted  to  the  Trading  and  Profit  and  Loss  Ac- 
counts are  posted  to  the  Balance  Sheet. 

7.     PROCEEDINGS  OF  EXCHANGE  COUNCILS 

266.  The   proceedings    of   the   exchange   council   for   each 
monthly  or  other  meeting  of  the  council  are  recorded  in  the 
Council  Book.     They  are  signed  by  the  senior  officer  of  the 
council  as  president,  and  the  junior  member  as  recorder,  and 
are  sent  to  the  commanding  officer  of  the  post  for  his  approval. 
The  forms  of  the  proceedings  of  exchange  councils  differ  in 
no  material  respect  from  those  of  any  other  military  board  of 
officers.     The  proceedings  consist  of  the  Financial  Statement 
of  the  exchange  for  the  month  and  all  actions  of  the  Exchange 
Council.      The   proceedings   of   the   Exchange   Council   in   the 
chapter  on  Model  Set  of  Double  Entry  Accounting  are  shown 
in  par.  192. 

The  Financial  Statement  in  these  proceedings,  however,  is 
for  the  initial  period  of  the  exchange,  and  does  not  show  the 
preceding  period  and  the^  increases  and  decreases  in  assets, 
liabilities,  profits,  etc.  (See  Par.  29,  above).  The  following 


SPECIAL  PROBLEMS 


145 


Financial    Statement   is,   therefore,   included   as    a   model*    for 
subsequent  periods. 


Jan.  31 

1917. 

Dec.  31 

1917. 

Increase 

Decrease 

Debits 

Credi 

g 

Debits 

Credit 

e 

TRIAL  BALANCE: 

Capital  Stoeir 

4000 

00 

4000 

00 

Reserve  Fund 

500 

00 

500 

00 

Surplus  Fund 

LOGO 

00 

1000 

00 

Accounts  Payable 

2208 

00 

2396 

75 

183 

75 

Total  Sales  lees  Returns.- 

Deptt.  A 

1652 

62 

1416 

21 

236 

41 

«   B 

1523 

21 

1374 

05 

149 

16 

"   C 

635 

32 

782 

30 

146 

9* 

Coupons: 

Issued           11560.00 

Sales  1  Redeemed)    U10.10 

Outstanding 

139 

90 

98 

15 

41 

75 

Discounts 

36 

40 

32 

55 

3 

65 

Building  and  Fixtures 

1600 

00 

1500 

00 

Total  Purchases  less  Returns; 

Dept.  A 

1210 

12 

1269 

13 

59 

01 

"   B 

1104 

70 

1328 

65 

223 

96 

"   C 

446 

90 

649 

40 

202 

50 

Udse.  oo  Hand  per  Inventory: 

Dept.  A 

850 

10 

762 

00 

86 

10 

'•   B 

1675 

50 

1510 

20 

165 

30 

"   C 

1600 

10 

1538 

00 

62 

10 

Cash: 

Total  Receipts    $3715.12 

-   Expenditures  3686.55 

Cash  on  Hand 

690 

03 

561 

46 

28 

57 

Accounts  Receivable 

692 

44 

656 

87 

35 

57 

Bills  Receivable  (£.  U.) 

1786 

00 

1500 

00 

285 

00 

(Rotes) 

55 

00 

150 

00 

96 

00 

Insurance  Unexpired 

23 

00 

24 

00 

1 

00 

Operating  Expense 

135 

41 

131 

73 

3 

68 

Building  and  Fixtures  Expense 

27 

25. 

18 

ft? 

8 

68 

-H&3L 

45 

_llfi25_ 

45 

11600 

01 

11600 

01 

TRADING  ACCOUNT.  DEPT.  A: 

Kdse.  on  Hand  per  Inv.  (x/1) 

850 

10 

762 

00 

88 

00 

Total  Purchases  less  Returns 

1210 

12 

1269 

13 

59 

01 

"   Sales 

1652 

62 

1416 

21 

236 

41 

Itdse.  on  Hand  per  lay.  lx/31) 

683 

00 

850 

10 

167 

10 

Gross  Prof-it 

275 

40 

235 

Ifl 

40 

22 

2335 

fi?, 

2335 

fi? 

2266 

?1 

2266 

7,} 

TRADING  ACCOUNT,  DEPT.  B: 

Mdse.  on  Hand  per  Inv.  (x/U 

1675 

50 

1610 

20 

165 

30 

Total  Purchases  less  Returns 

1104 

70 

1328 

65 

223 

95 

"   Sales      "    " 

1523 

21 

1374 

05 

149 

16 

Mdse.  on  Hand  per  Inv.  (x/31j 

1502 

52 

1675 

50 

172 

98 

Gross  Profit 

245 

fi? 

210 

70 

34 

83 

3025 

73 

3025 

73 

_3049 

f,ft 

3049 

f>f) 

TRADING  ACCOUNT.  DEPT.  C: 

lldse.  on  Hand  per  Inv.  (x/1) 

1600 

10 

1538 

00 

62 

10 

Total  Purchases  less  Returns 

446 

90 

649 

40 

202 

50 

"   Sales 

635 

32 

782 

30 

146 

98 

Mdse.  on  Hand  per  Inv.  lx/31) 

1570 

78 

1600 

10 

29 

32 

Gross  Profit 

159 

10 

195 

00 

35 

90 

2206 

10 

2206 

10 

2382 

40 

2382 

40 

*This  statement  shows  the  total  only  of  cash  receipts  and  expenditures.  A  true 
copy  of  the  Cash  Book  for  the  month  must  also  be  included  in  the  proceedings  to 
comply  with  Par.  5,  P.  E.  R. 


146 


A  MANUAL  FOR  POST  EXCHANGES 


Jan.  31 

1917. 

Dec.  31 

1916. 

Debit 

Credi 

8 

Debits 

Credits 

Increase 

Decrease 

PROFIT  AND  LOSS: 

Gross  'Prof  it,  Dept.'  A 

275 

40 

235 

18 

40 

22 

"     "     "   B 

245 

53 

210 

70 

34 

83 

"     »     "   C 

159 

10 

195 

00 

35 

90 

Discounts          . 

36 

40 

32 

55 

3 

85 

Operating  Expense 

135 

41 

131 

73 

3 

68 

Building  and  Fixtures  Expense 

27 

25 

18 

57 

8 

68 

Net  Profit 

553 

77 

523 

J.3 

30 

64 

716 

43 

716 

43 

673 

43 

673 

43 

BALANCE  SHEET: 

Liabilities: 

Capital  Stock 

4000 

00 

4000 

00 

Reserve  Fund 

500 

00 

500 

00 

Surplus  Fund 

1000 

00 

1000 

00 

Met  Profit 

553 

77 

523 

13 

Present  Worth  of  Exchange 

6053 

77 

6023 

13 

30 

64 

Accounts  Payable 

2208 

00 

2396 

75 

188 

75 

Coupons  Outstanding 

139 

90 

98 

15 

41 

75 

Assets: 

Building  and  Fixtures 

1500 

00 

1500 

00 

Mdse.  on  Hand  per  Inv.  (x/31 

Dept.  A 

683 

00 

850 

10 

167 

10 

"   B 

1502 

52 

1675 

50 

173 

98 

"   C 

1570 

78 

1600 

10 

29 

32 

Cash  on  Hand 

590 

03 

561 

46 

28 

57 

Accounts  Receivable 

692 

54- 

656 

87 

35 

S7 

Bills  Receivable  (a.  11.) 

1785 

00 

1500 

00 

285 

00 

(Notes) 

55 

00 

150 

00 

95 

00 

Insurance  Unexplred 

23 

00 

24 

00 

I 

00 

8401 

67 

8401 

67 

8518 

03 

8518 

03 

116 

30, 

January.  1917. 

December.  1916. 

Increase 

Decrease  . 

TURNOVERS  » 

Number* 

Dept.  A 

1.62 

1.55 

"   B 

.76 

.77 

"   C 

.30 

.31 

Average  length) 

Dept.  A 

18  days 

19  days 

1  mo.  10   " 

1  mo.  10   - 

"   C 

3  mos.  10   " 

3  mos.  10   " 

PERCENTAGES; 

Gross  Profits  on  Capital; 

Dept.  A 

4.55$ 
4.05$ 

3.90$ 
3.50$ 

.65$ 
.55$ 

"   C 

2.63$ 

3.24$ 

.61$ 

Net  Profit  on  Capital 

9.15$ 

8.70$ 

.45$ 

SPECIAL  PROBLEMS  147 

8.      AUDITING  ACCOUNTS 

267.  An  audit  is  an  official  examination  of  accounts  to 
determine  their  accuracy  and  genuineness.  It  is  at  once  appar- 
ent that  one  who  has  no  or  very  little  knowledge  of  accounts 
cannot  audit  them.  All  line  officers  as  organization  com- 
manders, sooner  or  later,  are  members  of  post  exchange  coun- 
cils, and  as  such  are  often  required  to  audit  the  accounts  of  the 
post  exchange.  Too  often  they  must  sign  the  accounts  as 
audited  when  they  have  made  no  intelligent  examination  of 
them,  merely  because  they  haven't  sufficient  knowledge  of  ac- 
counting. It  has  been  the  aim  in  this  book  to  present  the  whole 
subject  of  accounting  in  a  clear  and  comprehensive  way  so 
that  officers  can  without  previous  experience  and  study  gain 
sufficient  knowledge  of  accounting  to  enable  them  to  properly 
audit  accounts  of  post  exchanges.  The  post  exchange  regu- 
lations (pars.  316  and  320,  A.  R.,  1913);  (also  see  C26516, 
April  14,  1910;  C20869,  J.  A.  G.,  Jan.  11,  1907,  par.  672; 
40-100,  J.  A.  G.,  Feb.  24,  1915,  par.  673)  hold  the  members  of 
the  post  exchange  council  and  the  exchange  officer  responsible 
for  losses  which  by  proper  attention  and  management  can  be 
detected  and  prevented.  The  exchange  council  has  the  right  to 
expect  that  the  officer  or  committee  detailed  to  audit  the  ac- 
counts of  the  post  exchange  make  an  intelligent  and  thorough 
audit  of  them,  which,  of  course,  cannot  be  done  without  a 
knowledge  of  accounting. 

A  complete  audit  of  every  entry  and  balance  each  month  is 
not  practicable,  but  by  examining  certain  entries  and  balances, 
selected  at  random  but  well  distributed,  the  probabilities  of 
detecting  fraud  are  so  great  that  when  such  audits  are  regu- 
larly conducted,  manipulation  of  accounts  by  employees  will 
seldom  be  attempted.  In  a  complete  audit  of  the  accounts, 
however,  all  entries  and  balances  are  examined. 


148  A  MANUAL  FOR  POST  EXCHANGES 

268.     SYSTEMATIC    AUDIT    OF    ACCOUNTS.*     (1) 

Count  cash  on  hand  and  verify  cash  in  bank;  compare  with 
balance  shown  in  cash  account.  To  verify  cash  in  bank,  get  a 
balance  statement  from  the  bank  signed  by  its  cashier.  In 
case  any  checks  are  outstanding  they  will  have  to  be  deducted 
from  the  balance  shown  by  the  bank's  statement.  Where  checks 
are  used  that  have  the  name  of  the  exchange  printed  on  them, 
which  should  always  be  the  case,  all  checks  drawn  will  have  to 
be  taken  from  the  regular  check  book  and  the  stub  will  show 
the  amount  of  the  same. 

Take  an  inventory  and  inspection  of  coupon  books  on  hand 
(unissued).  The  value  of  coupons  on  hand  at  previous  in- 
ventory plus  the  value  of  new  coupon  books  received,  minus  the 
total  coupon  issue  since  equals  the  value  of  coupon  books  un- 
issued. 

(2)  Inventory    merchandise    in    storeroom    and    sales    de- 
partment,  keeping  the   two   inventories    separate.      The   com- 
bined inventories,  however,  will  represent  the  "merchandise  on 
hand"  with  which  to  debit  the  Merchandise  on  Hand  Account. 
Compare  amounts  of  five  or  more  articles  as  shown  on  inventory 
of  storeroom  with  the  amounts  shown  on  their  individual  stock 
accounts.     Compare  value  of  merchandise  in  each  sales  depart- 
ment as  shown  by  its  inventory  with  the  value  shown  in  its 
Sales  Department  Stock  Account. 

(3)  Take  steward's   daily  sales   report   for  any  five  days 
and  check  them  with  sales  as  recorded  in  the  Sales  Book,  and  with 
sales  as  credited  to  the  Sales  Department  Stock  Accounts,  on 
the  same  days.     Also  check  the  cash  sales  for  these  days  with 
cash  receipts  from  sales  as  recorded  in  the  Cash  Book  on  these 
days. 

(4)  Take   any   five   invoices   of  merchandise   bought,   and 
check  their  sums  as  entered  in  the  Purchase  Book.     Also,  check 
their  items  with  their  entries  in  the  Individual  Stock  Accounts. 

(5)  Take  any  five  entries  in  the  Purchase  Book  and  check 
with  the  invoices  which  they  represent. 

(6)  Take  any  five  entries  in  the  Purchase  Book  and  check 
with  their  corresponding  credit  entries  in  Accounts  Payable. 

*See  Par.   54. 


SPECIAL,  PROBLEMS  149 

(7)  Take  any  five  credit  entries  in  Accounts  Payable  and 
check  with  their  corresponding  entries  in  the  Purchase  Book. 

(8)  Determine  the  sums  of  any  five  customers'  accounts 
from  their  sales  credit  slips  and  check  with  amounts  charged 
against  them  both  on  statements  rendered  and  as  debit  entries 
to  Accounts  Receivable. 

(9)  Take  any  five  entries  in  Building  and  Fixtures  Account 
and  check  with  inventory  of  buildings  and  fixtures.     Take  any 
five  articles  in  inventory  of  buildings  and  fixtures  and  check  with 
entries  in  the  Building  and  Fixtures  Account  representing  those 
articles. 

(10)  Take  the  totals  of  coupons  issued  during  the  month 
to  each  member  of  the  exchange  and  check  with  their  corre- 
sponding credit  entries  in  Bills  Payable. 

(11)  Take  the  coupon  notes  of  three  men  in  each  company 
and  check  with  total  amounts  marked  in  blue  on  the  top  note 
of  each  man. 

(12)  Check  any  ten  entries  of  cash  expenditures  with  their 
corresponding  debit  entries  in  other  accounts.     Similarly,  check 
any  ten  entries  of  cash  receipts  with  their  corresponding  credit 
entries  in  other  accounts.     Call  at  random  for  the  vouchers  of 
ten  expenditures  to  see  if  such  expenditures  are  covered  with 
vouchers,  and,  if  so,  examine  them  to  see  they  are  proper  and 
sufficient  as  vouchers. 

(13)  Balance   any   five  accounts   and   one   controlling  ac- 
count. 

(14)  Compare  the  balances  of  any  five  accounts  with  the 
balances  shown  in  the  Trial  Balance. 

(15)  Add  both  sides  of  the  Trial  Balance,  using  adding 
machine  if  practicable. 

In  checking  an  entry  always  investigate  the  genuineness  of 
the  transaction  which  it  represents. 

The  audit,  as  outlined  above,  is  based  on  the  theory  of 
probabilities,  and,  if  it  is  desired  to  increase  the  probabilities 
of  detection  of  errors  and  manipulations  in  accounts,  the  num- 
ber of  entries  and  accounts  examined  may  be  doubled,  trebled, 
and  so  on  to  a  complete  audit  of  all  the  entries  and  accounts. 


150  A  MANUAL  FOR  POST  EXCHANGES 

The  audit  outlined  above,  however,  will  be  sufficient   for  the 
monthly  audit  of  post  exchange  accounts. 

The  following  are  some  of  the  more  common  methods  of 
manipulating  accounts  to  cover  frauds  and  defalcations  for 
which  the  auditor  should  especially  be  on  his  guard. 

(1)  Converting  moneys  to  private  use  received  from  custom- 
ers in  payment  of  their  bills  by  crediting  the  proper  Accounts 
Receivable,   but   debiting   some   account   other  than   the   Cash 
Account  with  the  same. 

(2)  Grafting  on  payments  from  customers  by  crediting  a 
part  of  an  account  receivable  as  merchandise  returned. 

(3)  Grafting  on  cash  expenditures  by  crediting  the  Cash 
Account  with  larger  payments  than  actually  made  for  insurance, 
taxes,  and  other  expenses. 

(4)  Crediting  the  Cash  Account  twice  for  an  account  pay- 
able paid  only  once. 

(5)  Using  the  cash  on  hand  from  day  to  day  for  personal 
use. 

(6)  Forgery  of  vouchers. 

(7)  Including  for  inventory  merchandise  not  yet  debited  to 
the  Purchase  Account. 

(8)  Check  covering  credit  entry  to  Cash  Account  made  out 
payable  to  some  one  other  than  the  party  that  is  debited  with 
the  same. 

9.     DISTRIBUTION  OF  PROFITS  AND  DIVIDENDS 

269.  Although  the  post  exchange  regulations  are  quite 
specific  and  clear  in  prescribing  how  the  profits  and  dividends 
shall  be  distributed,  it  is  perhaps  seldom  that  the  provisions 
therein  are  exactly  complied  with.  See  par.  41. 

The  distribution  shown  below  is  based  on  the  following  data : 
The  membership  of  and  shares  of  each  member  of  the  Post 
Exchange,  Fort  Reynolds,  are  as  follows: 

Headquarters  Co.,  40th  Infantry 58  shares 

Machine  Gun  Co 29        " 

Sanitary  Detachment   16        " 

Company  A,  40th  Infantry 65        " 

Company  B,  40th  Infantry : .  .      65        " 


SPECIAL,  PROBLEMS  151 

Company  C,  40th  Infantry 65   shares 

Company  D,  40th  Infantry 65        " 

Troop  A,  20th  Cavalry 70        " 

Total  number  of  shares 433 

Each  share  is  $5.00. 
The  net  profit  for  the  month  is  $500.00. 
The  coupon  sales  for  the  month  are  $2,000.00. 
The  cash  and  credit  sales  for  the  month  are  $1,750.00. 
The   following   standing  distributions   of  profits   have  been 
provided  for: 

(1)  Under  the  provisions  of  par.  41  (a)  five  percentum  of 
the  net  profits  to  regimental  funds. 

(2)  Under  the  provisions  of  par.  41  (b)  five  percentum  of 
net  profits  to  recreation  and  amusement  of  enlisted  men  as 
therein  prescribed. 

(3)  Under  the  provisions  of  par.  41  (c)  five  percentum  of 
the  net  profits  to  benefit  of  entire  garrison   as  therein  pre- 
scribed. 

(4)  To  Surplus  Fund  until  the  same  shall  have  reached 
$1,000.00,  ten  percentum  of  the  net  profits.     (It  is  assumed 
that  the  present  monthly  credit  to  this  fund  will  not  increase  it 
to  the  $1,000.00.) 

(5)  To  Sinking  Fund  for  purchase  of  additional  buildings 
and  fixtures,  two  percentum  of  the  net  profits.      (It  is  assumed 
that   the  reserve   fund   required  by  regulations,  par.   41,  has 
already  been  established.) 

(6)  The  balance  of  the  net  profits  to  be  distributed  as 
dividends  to  the  several  members  of  the  exchange. 

270.     DISTRIBUTION  OF  NET  PROFIT: 

(1)  To  Regimental  Funds:  5%  of  $500.00  =  $25.00. 
The  proportion  of  this  to  each  share  will  be  ($25.00  -H  433) 
$.05771,  and  to  the  several  members  as  follows: 

Hdqrs.  Co $.05771   X   58  —  $3.35 

M.  G.  Co "       X  29  =     1.68 

San.  Det.  "       X   16  =       .93 


152  A  MANUAL  FOR  POST  EXCHANGES 

Co.  A "  X  65  =  3.75 

Co.  B  "  X  65  =  3.75 

Co.  C  "  X  65  =  3.75 

Co.  D  "  X  65  =  3.75 

Troop  A "  X  70  =  4.04 

Of  this  $25.00  of  the  net  profit,  $4.04  will  be  paid  direct 

to  the  Regimental  Fund,  20th  Cavalry,  and  $20.96  direct  to 

the  Regimental  Fund,  40th  Infantry. 

(2)  To  recreation  and  amusement  of  enlisted  men  under 
the  provisions  of  par.  40(b)  5%  of  $500.00  =  $25.00.     This 
amount  will  be  credited  to  the  Recreation  and  Amusement  Fund. 
When  expenditures  are  made  from  this  fund,  this  account  is 
debited  and  the  Cash  Account  credited  with  the  same. 

(3)  To  benefit  of  entire  garrison  under  the  provisions  of 
par.  40(b)  :     5%  of  $500.00  =  $25.00.     This  amount  will  be 
credited  to  the  Benefit  of  the  Entire  Garrison  Fund  Account. 
When  expenditures  are  made  from  this  fund,  this  account  is 
debited  and  the  Cash  Account  credited  with  the  same. 

(4)  To  Surplus  Fund:    10%  of  $500.00  =  $50.00.     This 
amount  will  be  credited  to  the  Surplus  Fund  Account. 

(5)  To  Sinking  Fund  for  purchase  of  additional  buildings 
and  fixtures:    2%  of  $500.00  =  $10.00.     This  amount  will  be 
credited  to  the  Sinking  Fund.     When  expenditures  are  made 
from  this  fund,  this  account  is  debited  and  the  Cash  Account 
credited  with  the  same. 

(6)  Under  the  provisions  of  par.  41  (d)  the  balance  of  the 
net  profit  is  declared  as  dividends.     This  dividend  can  be  dis- 
tributed to  the  several  members  of  the  exchange,  either  entirely 
according  to  the  number  of  shares,  or  as  follows:    the  divi- 
dends to  be  divided  into  two  portions  proportional  to  the  cash 
and   coupon   sales ;   the    former   distributed   according   to   the 
number  of  shares  held  by  each ;  and  the  latter  according  to  the 
coupon  issue  to  each  member.     For  obvious  reasons  it  is  be- 
lieved that  the  latter  is  more  equitable  and  the  better. 

The  amount  available  for  dividends  is  found  as  follows : 

Total  Net  Profit $500.00 

To  Regimental  Funds $25.00 


SPECIAL  PROBLEMS  153 

To  Recreation  and  Amusement  .  $25.00 

To  Benefit  Entire  Garrison 25.00 

To  Surplus  Fund  . 50.00 

To   Sinking  Fund    10.00     $135.00 


Available  for  dividends $365.00 

271.     FIRST   METHOD   OF  DISTRIBUTION.     If  the 

dividends  are  distributed  according  to  the  number  of  shares 
held  by  each,  the  distribution  per  share  will  be  ($365.00  -r-  433) 
$.84295.  The  distribution  to  the  several  members  will  be  as 
follows : 

Hdqrs.  Co $.84295   X   58  =  $48.89 

M.  G.  Co "        X   29  =     24.45 

San.   Det "        X   16  =     13.49 

Co.   A    "       X   65  =     54.79 

Co.   B    "       X   65  =     54.79 

Co.    C    "        X  65  =     54.79 

Co.   D    "        X   65  =     54.79 

Troop  A "        X   70  =     59.01 


Total  Dividend $365.00 

272.  SECOND  METHOD  OF  DISTRIBUTION.  The 
-proportions  of  distribution  according  to  cash  and  coupon 
sales  in  this  case  where  the  cash  sales  are  $1,750.00  and  the 
coupon  sales  are  $2,000.00,  are  found  as  follows:  x  :  $365.00 
::  $1,750.00  :  ($2,000.00  +  $1,750.00),  where  x  equals  the 
proportion  to  be  distributed  according  to  the  cash  (and  credit) 
sales,  x  •  =  $170.33.  $365.00  -  -  $170.33  =  $194.67,  the 
amount  to  be  distributed  according  to  coupon  sales. 

Of  the  $170.33,  the  distribution  per  share  will  be  (170.33 
-f-  433)  $.3934.  The  distribution  to  members  will  be: 

Hdqrs.  Co $.3934   X   58  =  $22.81 

M.  G.  Co "      X  29  =  11.41 

San.   Det "       X   16  =  6.29 

Co.   A    "      X  65  —  25.57 

Co.  B                                              "      X   65  =  25.57 


154  A  MANUAL  FOR  POST  EXCHANGES 

Co.   C    "      X   65  =  25.57 

Co.  D    "      X  65  =  25.57 

Troop  A "       X   70  =  27.54 


$170.33 

Of  the  $194.67  portion  of  dividend  based  on  coupon  issue,  the 
distribution  per  dollar  of  coupon  issue  is  ($194.67  -r- 
$2,000.00)  $.09733.  It  will  be  noticed  that  the  dividend  is 
proportioned  according  to  "coupon  sales"  and  "cash  (and 
credit)"  sales,  but  that  the  proportion  based  on  "coupon  sales" 
must  be  distributed  to  the  several  members  according  to  their 
"coupon  issues."  This  is  necessary  for  no  record  of  coupon 
sales  by  companies  is  kept.  The  two,  however,  are  always 
very  nearly  the  same. 

If  we  assume  the  coupon  issue  to  the  several  companies  to 
have  been  as  shown  in  column  three  below,  the  distribution  per 
member  based  on  coupon  issue,  will  be  as  follows : 

Hdqrs.    Co $.09733   X  $272.00  =  $26.48 

M.  G.  Co "       X     190.00  =     18.49 

San.  Det "       X       75.00  =       7.30 

Co.  A "       X     295.00  =     28.71 

Co.  B   "       X     273.00  =     26.57 

Co.  C "       X     285.00  =     27.74 

Co.  D "       X     300.00  =     29.20 

Troop  A    "        X     310.00  =     30.18 


$2000.00       $194.67 
The  total  distribution  of  dividends  will  be  as  follows: 

Hdqrs.  Co $22.81   +  $26.48  =  $49.29 

M.  G.  Co 11.41  +     18.49  =     29.90 

San.  Det 6.29  +       7.30  =     13.59 

Co.  A 25.57  +     28.71  =     54.28 

Co.  B 25.57  +     26.57  =     52.14 

Co.  C 25.57  +     27.74  =     53.31 

Co.  D 25.57  +     29.20  =     54.77 

Troop  A    27.54  +     30.18  =     57.72 


Total  dividends  $170.33  +$194.67  =$365.00 


SPECIAL,  PROBLEMS  155 

In  practice  the  coupon  sales  are  nearly  equal  to  the  cash  and 
credit  sales — much  more  so  than  is  shown  by  the  above  arbi- 
trary proportion,  and  in  such  cases  it  is  often  customary  to 
provide  that  50%  of  the  net  profits  available  for  dividends  be 
distributed  according  to  the  number  of  shares,  and  50%  accord- 
ing to  the  coupon  issue. 

273.  ACCOUNTING  DISPOSITION  OF  DIVIDENDS. 
In  either  method  outlined  above,  the  dividends  are  usually  paid 
at  once  to  the  members.     In  such  cases  the  Dividend  Account  is 
debited  with  the  same  and  the  Cash  Account  credited.     Should  a 
company  be  indebted  to  the  Post  Exchange  for  capital  stock, 
or  other  bills,  its  proper  account  is  credited  with  the  dividend, 
the  Dividend  Account  being  debited  the  same  as  in  the  fore- 
going cases. 

10.     DEPRECIATIONS  IN  BUILDINGS  AND  FIXTURES 

274.  The  necessity   of  providing  funds    (1)    to   offset  de- 
preciations in  the  value  of  buildings  and  fixtures,  so  that  such 
depreciations  will  not  decrease  the  par  value  of  the  capital 
stock;  and  (2)   to  create  a  reserve  out  of  which  to  purchase 
new  buildings  and  fixtures,  instead  of  purchasing  them  out  of 
the  working  capital,  was  discussed  in  par.  81,  which  see.     This 
depreciation  for  buildings  amounts  to  from  nil  to  5%,  and  for 
furniture  from  7l/2%  to  10%.     Most  businesses,  however,  do 
not    debit    depreciations    to  the    expense    account,    but    debit 
the  monthly  or  yearly  depreciation  directly  to  the  Profit  and 
Loss  Account  after  having  taken  the  Trial  Balance. 

The  method  of  debiting  depreciations  to  the  Profit  and  Loss 
Account,  assuming  the  Trial  Balance  in  par.  188,  and  a  de- 
preciation of  10%  in  the  value  of  buildings  and  fixtures,  is  as 
follows : 

Profit  and  Loss  Account 

Gross  Profit $263.63 

Discounts   9.00 

Operating  Expenses $  45.45 

Buildings  and  Fixtures  Expenses 10.00 

Depreciation  in  Buildings  and  Fixtures  .  .  .        75.50 

Net  Profit    .  141.68 


$272.63     $272.63 


156  A  MANUAL  FOR  POST  EXCHANGES 

Balance  Sheet 

Capital   Stock    $2,165.00 

Accounts  Payable   965.50 

Coupons  Outstanding 78.20 

Net  Profit    141.68 

Buildings  and  Fixtures $755.00 

10%   Depreciation    75.50  $    679.50 


Merchandise  on  Hand  8/31,  '15 $    293.71 

Cash  on  Hand 74.12 

Cash  in  Bank 900.00 

Accounts  Receivable   348.05 

Bills  Receivable  (Enlisted  Men) 880.00 

Bills  Receivable  (Notes) 175.00 


$3,550.38     $3,550.38 

11.     BUYING  AND  SELLING 

275.  BUYING.  Good  judgment  in  buying  is  one  of  the 
prime  requisities  for  the  exchange  officer  and  steward  in  a  suc- 
cessful exchange.  How  often  we  see  the  shelves  of  an  exchange 
loaded  down  with  unsaleable  merchandise.  Such  merchandise 
represents  a  large  portion  of  the  working  capital  tied  up  and 
therefore  not  being  turned  over  to  produce  profits.  To  pro- 
duce large  profits  the  capital  stock  must  be  turned  over  often, 
and,  to  have  the  working  capital  available  for  turnover,  it  must 
be  invested  only  in  saleable  goods. 

A  concrete  example  will  show  this.  The  exchange  at  Fort 
A  buys  $100.00  worth  of  an  article  for  which  the  demand 
is  very  small.  It  takes  one  year  to  dispose  of  it.  Assum- 
ing the  profit  on  each  article  to  be  quite  large,  say  33^%, 
which  led  to  such  a  large  quantity  of  it  being  bought,  the  gross 
profit  on  it  at  the  end  of  one  year  when  it  is  all  disposed  of  will 
be  $33.33.  In  this  supposition  the  probability  of  the  mer- 
chandise deteriorating  or  entirely  spoiling  with  age  is  not 
considered. 


SPECIAL  PROBLEMS  157 

On  the  other  hand,  $100.00  is  invested  in  an  article  that  is  a 
good  seller,  the  amount  bought  being  just  sufficient  to  last  one 
month,  a  like  amount  being  ordered  each  month.  The  gross 
profit,  however  is  but  15%,  or  $15.00.  In  this  case  $100.00 
of  the  capital  stock  is  turned  over  every  month,  giving  each 
time  a  profit  of  $15.00,  or  a  gross  profit  of  $180.00  at  the  end 
of  the  year. 

If  it  were  practicable  to  handle  only  such  articles  as  sold 
quickly  and  easily,  the  success  of  the  exchange  would  be  com- 
paratively easy.  An  exchange,  however,  to  fulfill  its  functions 
must  handle  many  articles  which  are  not  such  good  sellers.  In 
such  cases,  each  of  such  articles  should  be  bought  in  the  smallest 
quantities  possible  from  the  wholesalers.  They  will  perhaps 
cost  somewhat  more  than  they  would  if  bought  in  larger  quan- 
tities, but  the  increased  profit  per  article  when  bought  in  large 
quantities  is  more  than  offset  by  having  more  of  the  capital 
stock  tied  up  in  them. 

Good  selling  articles*  should  be  bought  in  quantities  not 
larger  than  that  actually  required  in  a  turnover,  i.  e.,  to  sell 
the  articles  and  receive  the  payment  for  the  same.  This  period 
for  post  exchanges  is  one  month. 

When  the  different  articles  of  merchandise  are  bought  in  the 
quantities  specified  above,  the  working  capital  of  the  business  is 
invested  in  the  most  efficient  manner  possible.  And  such  an 
investment  is  the  criterion  of  the  proper  amount  of  working 
capital  that  the  exchange  should  have. 

Only  merchandise  of  good  quality  should  be  handled.  As  a 
rule  merchandise  of  poor  quality  has  no  sale,  but  all  articles 
of  merchandise  of  good  quality  are  not  good  sellers  by  any 
means.  Many  classes  of  merchandise  of  good  quality  are  not 
in  demand  by  the  soldiers.  So,  too,  where  some  good  brand 
of  merchandise  has  established  its  reputation  with  the  trade,  it 
is  very  difficult  to  sell  new  brands  of  the  same  article  although 
equally  good.  To  introduce  new  brands,  wholesalers,  therefore, 
sell  them  to  retailers  at  lower  prices  than  established  brands, 
the  greater  apparent  profit  acting  as  a  great  incentive  for  the 
retailer  to  load  his  shelves  with  the  same.  Generally  it  is  better 

*  Many   articles,   such  as  soft  drinks,   ice  cream,   candies,   fruits,   etc.,   can  usually 
be  ordered  daily  or  weekly  and  the  supply  on  hand  thus  kept  fresh. 


158  A  MANUAL,  FOR  POST  EXCHANGES 

to  handle  only  established  brands,  but  often  new  brands  are 
introduced  which  become  good  sellers  sooner  or  later,  often 
replacing  old  established  brands.  New  brands,  even  when  they 
seem  very  promising  should  always  be  bought  in  the  smallest 
quantities  possible  until  they  establish  themselves  as  good  sel- 
lers. It  often  takes  a  long  time  for  a  new  brand  to  establish 
itself,  and  if  bought  in  large  quantities  too  much  of  the  working 
capital  is  unduly  tied  up.  Often  too,  new  brands  that  seemed 
most  promising  at  first  turn  out  to  be  complete  failures,  and  in 
order  to  realize  anything  on  them  they  must  be  sold  at  a 
bargain. 

With  all  these  self-evident  facts  many  post  exchange  officers 
and  stewards  are  often  beguiled  into  violating  them  by  the 
cleverness  of  salesmen — and  all  old  salesmen  are  clever  men. 
In  such  cases  the  salesman  attains  a  temporary  ascendency  over 
the  buyer,  or  at  least  a  negative  one  in  which  the  buyer  does 
not  stop  to  think  of  the  ultimate  results  of  his  purchases  accord- 
ing to  his  real  knowledge  of  business. 

Efficient  buying  is  as  essential  to  a  successful  business  as 
efficient  selling,  and  the  efficient  buyer  must  be  just  as  clever  as 
the  efficient  salesman.  The  buyer  must  have  a  complete  knowl- 
edge of  the  merchandise  which  he  buys  and  the  prices  at  which 
different  wholesale  houses  sell.  For  the  latter  purpose  the 
exchange  officer  should  keep  a  tabular  list  of  articles  of  mer- 
chandise arranged  in  alphabetical  order,  with  vertical  columns 
opposite — one  for  each  wholesale  house — in  which  to  enter  the 
price  at  which  it  sells  the  same. 

The  buyer  of  the  exchange  should  always  receive  the  sales- 
men of  all  reputable  wholesale  houses,  and  in  a  courteous  and 
business  manner.  He  should  keep  as  many  salesmen  on  his 
"string"  as  possible.  He  should  listen  respectfully  to  the  sales- 
man's talk,  but  should  be  careful  not  to  be  led  into  violating 
business  maxims  for  some  apparent  "bargain."  If  the  sales- 
man's prices  on  such  articles  as  are  needed  are  lower  than  those 
that  are  offered  by  other  salesmen,  he  should  be  given  the  order 
for  them.  If  they  are  not  and  the  salesman  is  unduly  infringing 
on  the  time  of  the  exchange  officer,  the  latter  should  unhesi- 


SPECIAL  PROBLEMS  159 

tatingly  bring  the  interview  to  a  close  for  that  time,  which  can 
be  done  by  proper  decision  and  tact.  A  salesman  should  not  be 
told  the  price  at  which  articles  can  be  bought  from  other  sales- 
men. That  would  enable  the  former  to  undersell  by  a  verj 
small  margin,  when  it  might  be  possible  to  buy  from  him  foi 
much  less  if  he  were  in  the  dark  to  the  other  salesmen's  prices. 
If  salesmen  are  kept  in  the  dark  as  to  one  another's  prices, 
the  buyer  can  handle  them  most  successfully  and  get  from  them 
the  very  lowest  prices  at  which  they  can  possibly  sell. 

276.  SELLING.  The  mere  fact  that  the  business  is  a 
post  exchange  and  sells  at  lower  prices  than  retail  stores  in  the 
city,  does  not  relieve  the  attendants  from  being  courteous  and 
accommodating  to  their  patronage.  To  secure  and  hold  the 
trade  of  any  business  these  things  are  always  necessary. 

It  should  not  be  assumed  that  everybody  in  the  post  knows 
everything  that  is  kept  for  sale  at  the  post  exchange.  An 
alphabetical  list  of  the  articles  of  merchandise  kept  for  sale 
should  be  printed  and  distributed  over  the  post  two  or  three 
times  a  year.  Such  advertising  will  secure  for  the  exchange 
many  sales  to  customers  that  otherwise  would  be  made  down 
town. 

The  proper  display  of  goods  should  not  be  overlooked,  for 
many  extra  sales  are  made  when  the  display  calls  attention  to 
the  goods.  The  exchange  officer  and  steward  should  make  a 
continuous  study  of  displays  in  retail  stores  down  town. 

Unsaleable  merchandise  should  not  be  kept  on  the  shelves. 
With  the  most  judicious  buying  there  will  occasionally  be  a 
small  purchase  of  some  new  brand  or  article  that  has  failed  to 
take  with  the  trade.  In  such  case,  it  should  be  placed  out  on 
the  counter  and  sold  as  a  bargain.  Perhaps  the  cost  price  at 
least  may  be  realized,  and  the  capital  invested  in  it  will  be  no 
longer  tied  up.  So  too,  when  merchandise  becomes  shelf  worn, 
or  is  likely  to  spoil  and  becomes  worthless,  if  not  immediately 
disposed  of,  it  should  also  be  sold  as  a  bargain  before  it  is  too 
late  to  realize  nearly  its  cost  price ;  otherwise  it  will  be  a  total 


160  A  MANUAL  FOR  POST  EXCHANGES 

To  save  mistakes  and  unpleasantness  with  customers  all 
credit  sales  should  be  itemized  on  duplicating  sales  pads  simi- 
lar to  those  used  in  the  Sales  Commissary  and  the  customers 
required  to  sign  them.  The  copy  is  given  to  the  customer, 
and  the  original  is  retained  by  the  sales  clerk,  who  turns  it  in  to 
the  exchange  steward.  The  sales  slips  of  each  customer  are 
kept  separate,  and  at  the  end  of  the  month  a  statement  show- 
ing the  total  of  each  sale  is  made  from  them  and  rendered  to  the 
customer.  When  the  customer  pays  his  bill  for  the  month,  all 
his  sales  slips  are  turned  over  to  him. 

It  is  well  to  require  customers  who  send  messengers  for  mer- 
chandise which  is  to  be  charged  to  them,  to  send  written  orders 
for  the  same.  In  such  cases  the  carbon  copy  of  the  sales  slip 
should  be  wrapped  with  the  merchandise.  Where  merchandise 
is  delivered  by  the  post  exchange,  it  is  also  well  to  require  the 
customers  to  sign  the  original  sales  slips  at  the  time  of  de- 
liveries. 

12.     POST  EXCHANGE  ADMINISTRATION 

277.  A  great  deal  upon  the  subject  of  post  exchange  ad- 
ministration has  been  included  in  the  preceding  sections  of  this 
chapter.  This  section  will,  therefore,  be  devoted  more  to  the 
general  supervision,  etc.,  of  the  exchange. 

New  sales  clerks  should  be  fully  instructed  in  the  art  of 
salesmanship;  it  should  not  be  assumed  that  everybody  knows 
how  to  sell — even  in  a  small  retail  store.  The  exchange  steward 
and  old  sales  clerk  should  be  able  to  give  new  men  much  valuable 
instruction  as  a  result  of  their  own  experiences.  Sales  clerks 
should  be  taught  to  be  courteous  and  accommodating  as  part 
of  their  salesmanship  instruction. 

While  all  the  attendants  of  the  post  exchange  are  assumed 
to  be  good  and  honest  men,  this  does  not  relieve  the  post  ex- 
change officer  from  maintaining  a  close  supervision  over  the 
exchange  and  its  attendants  and  having  full  knowledge  of 
everything  about  it  at  all  times  in  order  to  detect  and  prevent 
the  possibility  of  any  and  all  indifference  and  dishonesty  on 
their  part. 


SPECIAL  PROBLEMS  161 

The  exchange  officer  and  steward  should  be  business  men,  and 
the  exchange  officer  should  be  relieved  of  all  other  military 
duties.  An  exchange  officer  who  maintains  the  proper  super- 
vision over  the  exchange,  does  the  buying,  etc.,  will  have  no  time 
for  other  duties.  And  where  he  is  required  to  do  other  duties 
that  take  him  from  the  exchange  much  of  his  time,  it  is  not  right 
to  expect,  and  he  cannot  be  held  to  such  a  strict  accountability 
for  the  proper  and  successful  administration  of  the  exchange. 

The  organization  of  a  post  exchange  should  be  adapted  to  the 
size  of  its  business,  or  the  size  of  the  post.  There  should  be  no 
more  attendants  than  are  needed,  but  on  the  other  hand,  there 
should  be  sufficient  attendants  to  properly  conduct  its  business. 
In  large  exchanges  care  must  be  exercised  not  to  develop  a  too 
complicated  organization.  There  is  a  tendency  for  some  men, 
to  develop  complex  systems  with  which  they  fall  in  love,  think- 
ing more  of  their  "system"  than  the  success  of  the  business. 
The  accounting  for  the  exchange  should  be  systematic  and 
simple,  but  extensive  enough  to  maintain  the  proper  accounting 
supervision  of  the  business.  Superfluous  and  complicated  office 
methods  and  clumsy  handling  of  business  should  be  avoided. 

The  exchange,  that  maintains  a  superfluous  and  unnecessary 
lot  of  office  and  exchange  attendants,  will  have  no  surplus  for 
profits.  The  organization  should  be  just  sufficient  to  handle 
the  trade  and  to  keep  the  necessary  records  and  accounts  of 
the  same. 

13.     RELIEF  OF  EXCHANGE  OFFICER 

278.  Whenever  an  exchange  officer  is  relieved  and  a  new  one 
appointed,  the  accounts  of  the  exchange  should  be  balanced  and 
audited,  and  an  inventory  taken  of  the  merchandise  on  hand, 
furniture,  fixtures,  etc.     When  the  change  takes  place  on  the 
last  day  of  the  month,  the  regular  monthly  balance  and  audit 
and  inventory  will  do. 

279.  TRANSFER  OF  POST  EXCHANGE  FUND.    The 

old  exchange  officer  should  make  a  check  equal  to  the  cash  in 
bank  and  payable  to  the  Post  Exchange.     The  new  exchange 


162  A  MANUAL  FOR  POST  EXCHANGES 

officer  endorses  the  check  as  exchange  officer  and  deposits  it  to 
the  credit  of  the  Post  Exchange  Fund.  In  the  lower  left  hand 
corner  of  the  check  should  be  added:  "Transfer  of  J?wnd" 
A  letter  of  notification  should  be  written  to  the  bank  by  the 
old  exchange  officer  of  the  change  of  exchange  officers,  and  the 
letter  should  contain  the  autograph  of  the  new  exchange  officer. 
This  autograph  should  be  in  the  body  of  the  letter  so  that  the 
signature  of  the  old  exchange  officer  will  attest  it.  The  letter 
may  be  mailed  by  the  old  exchange  officer,  or  given  to  the  new 
exchange  officer  who  should  take  it  to  the  bank  with  the  above 
described  check. 

This  check  to  cover  the  balance  in  the  bank  relieves  the  new 
exchange  officer  of  all  probabilities  of  checks  outstanding  not 
being  reported. 

The  old  exchange  officer  must  also  write  to  the  bank,  in  which 
the  reserve  fund  is  deposited,  notifying  it  of  the  change  of  ex- 
change officers,  and  including  within  the  body  of  the  letter  the 
autograph  of  the  new  exchange  officer. 

The  new  exchange  officer  should  count  the  cash  on  hand 
turned  over  to  him  and  give  the  old  exchange  officer  a  personal 
receipt  for  the  same. 

"In  transferring  funds  to  the  successor,  the  accountable 
officer  will  make  the  following  certificate,  including  list  of  out- 
standing debts  and  obligations,  in  the  council  book.  .  .  .  : 

"I  certify  that  to  the  best  of  my  knowledge  and  belief,  the 
following  is  a  complete  and  accurate  statement  of  all  outstand- 
ing debts  and  obligations  to  date  payable  from  this  fund. 
(C.  A.  R.  No.  6,  May  13,  1914.)" 

See  Par.  324,  Army  Regulations,  1913,  paragraph  12,  above. 

280.  INFORMATION  OF  THE  EXCHANGE.  The  old 
exchange  officer  should  turn  over  full  and  complete  information 
in  regard  to  the  exchange  to  his  successor.  Methods  employed 
in  the  office,  in  the  sales  departments,  storeroom,  in  buying  and 
selling,  etc.,  should  all  be  explained.  If  the  new  exchange  officer 
be  inexperienced  in  post  exchanges,  and  especially  so  if  he  be 
inexperienced  in  business,  he  should  appreciate  all  information 
and  advice  that  the  old  exchange  officer  can  undoubtedly  give 
him. 


SPECIAL,  PROBLEMS  163 

14.     COMPANY  EXCHANGES 

281.  "When  troops  are  absent  from  posts  the  commanding 
officer  may,  in  his  discretion,  authorize  the  establishment  of 
camp,  regimental,  battalion,  company  or  detachment  exchanges. 

"Such  exchanges  will  be  conducted,  as  far  as  practicable,  in 
conformity  to  these  regulations."  (Ext.  Par.  25,  above.) 

Company  exchanges  will  usually  be  authorized  in  temporary 
camps  and  stations  where  the  probability  of  moving  would  not 
justify  the  establishment  of  a  camp  or  regimental  exchange. 
These  exchanges  will  generally  have  only  a  small  stock  of 
tobacco,  candies,  and  other  necessities  in  the  field  not  supplied 
by  the  government.  Often  they  will  be  the  only  source  from 
which  such  supplies  can  be  obtained  by  the  soldiers,  and,  in  any 
case,  will  insure  such  supplies  being  obtained  at  reasonable 
prices. 

282.  BOOKKEEPING     AND     ACCOUNTING.     Double 
entry  bookkeeping  for  company  exchanges  in  the  field  or  in 
temporary  camps  is  both  impracticable  and  unnecessary.     The 
following  method  of  bookkeeping  and  accounting  for  company 
exchanges  is  suggested. 

(1)  Accounts  Payable.     A  small  ledger  can  be  conveniently 
used  in  which  to  keep  Accounts  Payable ;    or,  when  the  number 
of  such  accounts  is  only  three  or  four,  the  last  few  pages  in  the 
Company  Council  Book  can  be  conveniently  ruled  and  used  for 
them.     At  the  end  of  the  month,  or  other  time,  when  the  com- 
pany council  meets,  a  list  of  the  Accounts  Payable  is  included 
in  the  proceedings  of  the  company  council. 

(2)  Charge  and  Cash  Sales  Sheet.     While  a  small  ledger 
may  be  used  for  charge  sales  to  men  of  the  company,  a  much 
more  simple  method  is  to  arrange  the  names   of  the  men  in 
tabular  form,  in  the  same  order  they  appear  on  the  pay  roll. 
To  the  right  of  the  names  vertical  money  columns  are  provided 
for  each  day  of  the  month,  one  for  "Totals,"  one  for  amounts 
"Collected"  and  one  for  amounts  "Uncollected."     In  addition 
to  the  names,  one  line  is  provided  for  "Cash  Sales,"  and  one  for- 
"Totals."     Charge  sales  are  entered  on  this  sheet  direct,  no» 
other  records  being  kept.     The  total  of  charge  sales  to  eacht 


164  A  MANUAL  FOR,  POST  EXCHANGES 

man  during  the  month  is  shown  in  the  "Totals"  column  to  the 
right;  the  total  of  sales  for  each  day  is  shown  at  the  bottom. 
The  sums  of  the  two  sets  of  totals  should  check. 

The  total  cash  sales  for  each  day  is  entered  on  this  sheet,  no 
other  record  being  kept. 

This  sheet  is  also  used  for  collections  on  pay  day.  The 
amount  paid  by  each  man  is  entered  in  the  "Collected"  column, 
and  any  amount  not  paid  is  entered  in  the  "Uncollected"  column. 
The  sum  of  these  two  columns  should  check  with  the  sum  of  the 
"Totals"  column. 

Should  there  be  any  accounts  not  paid,  an  extra  money 
column  must  be  provided  in  the  Charge  and  Sales  Sheets  for  the 
ensuing  month  in  which  to  carry  them  forward. 

The  total  collected,  including  the  total  of  cash  sales  for  the 
month,  is  debited  to  the  company  council  book,  the  Charge  and 
Cash  Sales  Sheet  .being  used  as  a  voucher  for  the  entry.  The 
sheet  contains  the  certificate  of  the  company  commander  that 
the  same  is  true  and  correct. 

Payments  for  supplies,  expenses,  etc.,  are  entered  to  the 
council  book  direct,  the  same  as  for  any  other  expenditures 
made  from  the  company  fund. 


CHAPTER  VI 

DIGEST  OF  OPINIONS  OF  THE  JUDGE  ADVOCATE- 
GENERAL  OF  THE  ARMY  ON  OR  IN 
RELATION  TO  POST  EXCHANGES 

I.     GOVERNMENT   AGENCIES    AND   INSTRUMEN- 
TALITIES IN  GENERAL. 

283.  CREATION     OF.     Congress     may     establish     such 
agencies  or  instrumentalities  in  connection  with  the  military 
establishment   as   it  may   deem   necessary  to   the   efficiency   or 
comfort  of  the  troops  or  desirable  for  their  welfare.     A  similar 
right  to  establish  Government  agencies   and  instrumentalities 
and  to  prescribe  suitable  regulations  for  their  government  and 
administration  has  been  resorted  to  by  the  Secretary  of  War 
whenever   the    necessities    of   the   military   establishment   have 
warranted   such   exercise   of  executive   power,   and   his   action 
in  establishing  them  and  prescribing  rules   for  their  govern- 
ment and  control  has  been  recognized  by  Congress  in  making 
appropriations  for  their  support  and  has  been  recognized  by 
the  courts  and  by  other  executive  departments  of  the  Govern- 
ment.    The  practice  of  establishing  such  Government  agencies 
and   instrumentalities   has   existed   for  more   than   a   century. 
Held,  therefore,  that  i*  is  within  the  authority  of  the  Secretary 
of  War  to  authorize  the  establishment  of  a  laundry  at  a  military 
post  and  to  prescribe  regulations  for  its  administration  and 
control.     C,  18224,  Sept.  8,  1906. 

284.  STOPPAGES  OF  PAY  TO  REIMBURSE  POST 
EXCHANGES.     When  the  post  exchange  (then  called  can- 
teen) was  of  a  private  character,  it  was  held  that  stoppages  of 
pay  could  not  be  made  to  reimburse  losses  of  canteen  funds ; 
and  at  that  time  the  Treasury  Department  also  held  that  can- 
teens were  taxable  by  the  Government.    Subsequently  (in  1897^ 
the  Treasury  Department  held  that  post  exchanges  as  thei*. 
organized    under    the    orders    of    the    War   Department   were 
Government  instrumentalities  or  agencies  and  were  therefore 


166  A  MANUAL  FOR  POST  EXCHANGES 

not  taxable  under  the  internal  revenue  laws.  Now  the  funds 
of  the  post  exchange  are  moneys  used  in  carrying  on  this  public 
agency,  and  the  Government  has  a  right  to  protect  its  instru- 
mentalities— the  establishments  through  which  it  carries  on 
public  business.  Held,  therefore,  that  stoppages  against  the 
pay  of  officers  and  enlisted  men,  whether  on  the  active  or  retired 
list,  may  legally  be  made  to  reimburse  the  post  exchange  fund 
on  account  of  losses  for  which  such  officers  and  enlisted  men  are 
responsible,  and  in  case  of  a  deceased  officer  or  soldier  the 
amount  due  the  post  exchange  may  be  deducted  from  the  pay 
and  allowances  due  the  estate  of  the  deceased.  C,  3171,  June  7, 
1897;  7186,  Oct.  19,  1899;  12195,  Mar.  12,  1902;  13104, 
Aug.  14,  1902;  15714;  Jan.  18,  1904;  19112,  Jan.  2,  1907; 
26161,  Apr.  3,  1911.  As  the  pay  of  an  officer  or  soldier  or 
employee  may  be  stopped  to  pay  an  indebtedness  due  the  United 
States,  it  may  with  equal  legality  and  propriety  be  stopped  to 
pay  an  indebtedness  due  to  a  Government  agency  or  instru- 
mentality which  has  been  established  by  proper  legislative  or 
executive  authority.  C.  18884,  Sept.  8,  1906. 

285.  COURT  MARTIAL  SENTENCE  OF  FORFEI- 
TURE OF  PAY  TO  SATISFY  INDEBTEDNESS  TO 
POST  EXCHANGE.  A  retired  sergeant  major,  United 
States  Army,  had  been  tried  by  court-martial  for  the  larceny 
of  certain  funds  belonging  to  the  post  exchange  at  the  post 
where  he  was  serving  while  he  was  exchange  steward.  He  was 
sentenced  to  forfeit  $50  per  month  of  his  pay  for  the  period  of 
one  year,  and  thereafter  to  suffer  a  stoppage  of  a  like  amount 
per  month  to  reimburse  the  post  exchange  until  the  sum  of 
$875  should  be  paid  to  said  post  exchange,  that  sum  being  the 
amount  of  his  indebtedness  on  account  of  said  larcenies. 

Section  4818,  Revised  Statutes,  provided: 

"For  the  support  of  the  Soldiers'  Home  the  following  funds 
are  set  apart,  and  hereby  appropriated:  All  stoppages  or 
fines  adjudged  against  soldiers  by  sentences  of  courts-martial, 
over  and  above  any  amount  that  may  be  due  for  the  reimburse- 
ment of  Government  or  of  individuals;  .  .  .  .  ." 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    167 

Held,  that  the  stoppage  of  pay  to  reimburse  the  Govern- 
ment or  a  Government  agency  on  account  of  losses  for  which 
officers  and  enlisted  men  are  responsible,  is  purely  an  adminis- 
trative matter  with  which  courts-martial  have  nothing  to  do ; 
that  such  part  of  sentence  as  directed  a  stoppage  of  pay  to 
reimburse  the  post  exchange  was  unauthorized,  and  should  be 
disregarded;  and  that  the  sentence  should  stand  as  though  it 
read  only  for  the  forfeiture  of  $50  per  month  for  a  period  of 
one  year.  Held  further,  that  a  post  exchange  is  an  agency  or 
instrumentality  of  the  Government,  and  comes  within  the  class 
of  individuals  mentioned  in  section  4818,  Revised  Statutes ; 
that  there  was  no  pay  against  which  the  forfeiture  could  run 
until  the  indebtedness  to  the  post  exchange  had  been  satisfied; 
and  that  when  so  satisfied  the  forfeiture  or  fine  would  begin  tq 
run  against  the  soldier's  pay  and  continue  for  the  time  specified, 
the  amount  as  collected  being  appropriated  to  the  Soldiers' 
Home.  Comp.  Geo.  E.  Downey,  June  11,  191^. 

286.  LIABILITY  OF  SOLDIER'S  DEPOSITS  FOR 
INDEBTEDNESS  TO POST  EX- 
CHANGE. A  soldier  who  was  discharged  for  fraudulent  en- 
listment owed  $1.50  to  a  quartermaster  laundry  and  $3  to  a 
post  exchange,  and  the  question  was  submitted  whether  these 
debts  were  properly  chargeable  against  pay  and  clothing 
credits  and,  if  not,  whether  they  were  a  proper  charge  against 
a  deposit  of  $10  made  by  the  soldier  as  shown  by  his  deposit 
book. 

Held,  that  the  repudiation  of  the  soldier's  contract  for  fraud 
placed  him  in  the  position  of  having  legally  earned  no  pay  or 
allowances,  and  having  earned  none  there  were  none  unpaid 
with  which  to  pay  his  indebtedness  to  the  laundry  and  post  ex- 
change, except  that  the  laundry  service  having  been  performed 
by  the  government  at  public  expense  should  be  regarded  as  an 
advance  of  pay  and  the  appropriation  for  the  laundry  should 
be  reimbursed  from  the  appropriation  for  the  pay  of  the  Army. 

Held  further,  that  the  post  exchange  could  not  be  reimbursed 
under  the  same  principle  nor  could  such  indebtedness  be  satisfied 
from  the  soldier's  deposits  for  the  following  reasons,  viz: 


168  A  MANUAL  FOR  POST  EXCHANGES 

Section  1305,  Revised  Statutes,  as  amended  (34  Stat.  246) 
declares  that  soldiers'  deposits  shall  be  exempt  from  liability 
for  their  debts.  This  exemption  has  been  held  not  to  apply  to 
any  indebtedness  to  the  United  States  (16  Comp.  Dec.  566), 
but  an  indebtedness  to  a  post  exchange  is  not  an  indebtedness 
to  the  United  States  and  the  Government  assumes  no  liability 
therefor  further  than  to  use  a  part  of  the  soldier's  pay,  if  there 
be  any,  to  protect  the  exchange.  Therefore,  the  inhibition  in 
section  1305,  R.  S.,  that  deposits  shall  be  exempt  from  liability 
from  the  soldier's  debts  applies  to  any  indebtedness  which  is 
not  an  indebtedness  to  the  United  States,  and  as  a  post  ex- 
change, in  the  purview  of  this  statute,  is  on  the  same  footing 
as  an  individual,  the  soldier's  deposits  and  interest  were  payable 
to  him  without  diminution  on  account  of  such  indebtedness. 
(Comp.  W.  W.  Warwick,  April  00,  1916.) 

Note:     Par.  1368  A.  R.  will  be  amended  so  as  to  conform  with  the  above  ruling. 

287.  DEBT  DUE  GOVERNMENT  AGENCY  COL- 
LECTED AT  PAY  TABLE.  The  pay  of  an  enlisted  man 
which  has  been  turned  over  to  his  company  commander  at  the 
payment  of  the  company  because  the  soldier  was  absent  from 
the  pay  table  continues  to  be  Government  funds  until  it  reaches 
the  hands  of  the  soldier  unless  some  act  of  the  soldier,  such,  for 
instance,  as  a  request  to  the  company  commander  in  respect  to 
the  disposition  of  the  whole  or  a  part  of  his  pay,  operates  as  a 
technical  reduction  to  possession.  In  the  event  of  such  an  act 
such  portion  as  the  soldier  should  request  the  company  com- 
mander to  pay  to  creditors  would  be  regarded  as  having  been 
reduced  to  possession  and  might  be  paid  in  accordance  with  the 
soldier's  request,  and  if  the  soldier  has  deserted  the  balance 
should  be  treated  as  the  effects  of  a  deserter,  provided  the 
soldier's  request  was  that  the  balance  be  held  as  a  deposit  sub- 
ject to  the  soldier's  orders.  But  where  there  is  a  well-established 
practice  to  collect  at  the  pay  table  sums  due  to  the  post  ex- 
change, the  company  fund,  and  other  Government  instrumentali- 
ties, such  collections  being  made  at  the  instant  of  payment  when 
the  soldier  is  present  to  receive  his  pay,  a  corresponding  deduc- 
tion should  be  made  at  the  same  instant  in  a  case  where  the 


DIGEST  or  OPINION  IN  RELATION  TO  POST  EXCHANGES    169 

money  due  the  soldier  is  handed  to  his  company  commander. 
Such  a  well-established  custom  may  be  regarded  as  a  request  by 
the  soldier  to  pay  the  dues  established  by  custom.  Therefore 
held,  that  the  total  amount  due  a  post  exchange,  a  company  fund, 
or  other  government  instrumentality,  and,  according  to  the 
established  custom  payable  to  those  instrumentalities  on  the 
receipt  of  pay  from  the  paymaster,  should  be  considered  by 
reason  of  such  custom  as  technically  reduced  to  possession,  and 
paid  to  the  creditors  in  conformity  to  such  custom,  and  the 
balance,  not  having  been  reduced  to  possession  either  actually 
or  technically,  should  be  considered  as  retaining  the  character 
of  public  funds  and  returned  to  the  paymaster.  C.  12227, 
Feb.  12,  1907,  and  Oct.  12,  1909. 

288.  CUSTODIAN'S  OF  POST  EXCHANGE  RE- 
SPONSIBILITY GREATER  THAN  THAT  OF  A 
GRATUITOUS  BAILEE.  Post  exchange,  company,  hospital, 
bakery,  etc.,  funds  are  quasi-public  funds,  i.  e.,  funds  used  to 
carry  on  public  agencies  or  instrumentalities  of  the  Govern- 
ment, losses  of  which  can  be  reimbursed  from  stoppages  of 
pay  of  the  officer  or  soldier  responsible  therefor.  From  this 
it  follows  that  the  liability  of  the  responsible  officer  or  soldier 
is  not  that  of  a  bailee  without  compensation,  but  of  an  official 
charged  with  the  custody  of  funds  in  a  public  capacity  devolv- 
ing an  official  duty  and  a  material  trust,  in  the  discharge  of 
which  a  greater  degree  of  care  is  required  than  in  the  case  of 
a  gratuitous  bailment.  C.  13597,  Nov.  24,  1902;  13867, 
Jan.  2,  1903;  14575,  May  1,  1903;  16065,  Mar.  24,  1904; 
25552,  Sept.  11,  1909.  So  where  the  officer  in  charge  of  a 
post  exchange,  in  conveying  the  funds  of  the  exchange  from  the 
post  to  a  bank  in  town  for  deposit,  placed  them  in  a  package 
inside  of  the  breast  of  his  blouse  which  was  without  pockets, 
and  the  package  slipped  down  and  was  lost,  held,  that  the 
officer  had  not  used  due  care  and  should  be  charged  with  the 
amount  of  the  loss.  P.  54,  41,  June  7,  1892.  So  where  a  post 
exchange  officer  placed  in  a  sack  a  sum  amounting  to  over  $1600 
for  deposit  in  a  bank  at  a  distant  point,  and  without  properly 
sealing  and  stamping  the  sack,  delivered  it  to  an  enlisted  man, 


170  A  MANUAL  FOR  POST  EXCHANGES 

who  in  turn  delivered  it  to  a  private  stage  company,  which  was 
not  prepared  to  properly  guard  and  protect  a  package  of  such 
value,  and  the  stage  line  delivered  it  to  the  Wells-Fargo  Ex- 
press Co.,  which  latter  company  delivered  the  package  to  the 
bank,  where  it  was  found  that  there  was  a  hole  in  the  sack  and 
original  sum  was  short  by  over  $500,  held  that  the  exchange 
officer  was  guilty  of  carelessness  and  should  be  held  for  the  loss. 
C.  19112,  Feb.  2,  1906.  Where  an  officer  stationed  in  the 
island  of  Mindanao  kept  his  company  fund  in  a  wooden  box 
made  of  one  inch  lumber  bound  with  iron,  the  box  being  securely 
bolted  to  the  house  and  locked  with  a  Yale  lock,  and  it  appeared 
that  other  officers  had  kept  their  private  funds  in  the  box,  held, 
that  the  fact  that  the  officer  could  have  used  the  safe  of  the 
post  quartermaster  in  which  to  deposit  his  company  fund,  but 
did  not  do  so  because  the  deposit  of  the  funds  in  that  place  would 
subject  him  to  more  or  less  delay  in  handling  the  funds,  did  not 
necessarily  constitute  evidence  of  proper  lack  of  care.  C. 
20003,  Oct.  2,  1906.  Where  a  company  commander  placed 
over  $600  of  his  company  fund  and  over  $450  of  his  private 
funds  in  a  steel  box  of  %  inch  steel  plates,  which  was  placed  in 
his  quarters  at  Camp  Bumpus,  Leyte,  P.  I.,  and  fastened  to 
the  floor  by  screws  from  the  inside  of  the  box  so  that  they  could 
be  reached  only  after  the  box  had  been  opened,  and  during  the 
absence  of  the  officer  from  his  quarters  about  6  P.  M.  the  box 
was  broken  into  by  means  of  a  hatchet  and  the  contents  stolen, 
held,  that  the  officer  should  not  be  held  responsible  for  the 
loss  of  the  funds.  C.  25552,  Sept.  11,  1909.  A  company  was 
to  leave  the  next  day  for  another  station  and  a  bill  for  company 
supplies  was  to  be  paid,  and  an  apparently  entirelv  reliable 
noncommissioned  officer  whose  duties  as  acting  quartermaster 
sergeant  naturally  pointed  him  out  for  the  work  was  given  $50 
by  the  company  commander  to  pay  a  creditor,  and  the  non- 
commissioned officer  disappeared  with  the  money,  and  it  ap- 
peared the  noncommissioned  officer  at  the  time  of  his  desertion 
had  a  deposit  of  $50,  about  $36  of  pay  due  him,  an  undrawn 
clothing  balance  of  several  dollars,  and  the  prospect  of  his 
discharge  in  four  months  with  mileage  from  San  Francisco  to 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    171 

New  York,  held,  that  as  in  the  conduct  of  business  it  is  abso- 
lutely necessary  that  certain  persons  be  trusted,  and  there 
appeared  to  be  every  reason  to  trust  the  noncommissioned  officer 
in  the  case,  the  officer  was  without  negligence.  C.  16065,  Mar. 
24,  1904-  But  where  there  was  no  urgent  haste  about  the 
payment  of  the  bill,  and  the  sum  of  $115  was  intrusted  by  the 
company  commander  to  a  sergeant  to  pay  a  bill  against  the 
company  fund,  and  the  sergeant  disappeared  with  the  money, 
and  it  appeared  there  was  a  month's  pay  due  the  sergeant,  with 
mileage  from  San  Francisco  to  Washington,  and  a  probable 
small  balance  on  his  clothing  account,  the  two  latter  items, 
however,  not  being  due  for  about  18  months,  held,  that  the  facts 
were  not  sufficient  to  justify  the  release  of  the  company  com- 
mander from  responsibility.  C.  18898,  Dec.  8,  1905.  Where 
the  officer  in  charge  of  a  post  exchange  at  a  post  adjoining  the 
city,  having  in  his  hands  for  deposit  in  bank  about  $1,000 
of  post  exchange  funds,  instead  of  personally  attending  to  the 
deposit,  sent  in  to  the  bank  with  the  funds  the  post  exchange 
steward,  who  appropriated  to  his  own  use  a  portion  of  the 
amount  and  did  not  return  to  the  post  till  arrested  by  the  civil 
authorities,  held,  that  the  officer  had  not  taken  the  degree  of 
care  properly  required  of  him,  and  was  responsible  for  the 
amount  lost.  P.  64138,  Mar.  8,  1894;  C.  13867,  Jan.  2,  1903. 
And  where  the  company  commander  was  sick  in  his  quarters 
and  the  only  other  officer  on  duty  with  the  company  was  the 
officer  of  the  day,  and  it  was  necessary  to  obtain  change  for  use 
on  pay  day,  and  the  company  commander  intrusted  to  his  first 
sergeant  a  check  for  $75,  with  which  to  obtain  change  at  a 
town  7  miles  away,  and  the  first  sergeant  disappeared  with  the 
money,  held  that  as  in  the  conduct  of  all  business  operations, 
there  must  be  necessarily  a  certain  degree  of  trust  shown  in 
handling  of  funds,  and  the  company  commander  had  no  reason 
to  be  on  his  guard  against  the  theft  or  desertion  of  the  first 
sergeant,  he  should  not  be  held  responsible  for  the  loss  of  the 
company  fund.  C.  29057,  Oct.  3,  1911.  The  "bakery  fund" 
is  a  government  instrumentality.  Not  being  public  money  the 
officer  in  charge  may  be  relieved  by  competent  authority  from 


172  A  MANUAL,  FOR  POST  EXCHANGES 

responsibility  for  a  loss.  Therefore,  where  a  medical  officer 
detailed  as  post  treasurer  places  the  bakery  fund,  with  the  con- 
sent of  the  senior  medical  officer  of  the  post,  for  safe  keeping 
in  the  safe  provided  by  the  government  at  the  hospital  for  the 
use  of  the  medical  officer  in  charge,  and  in  which  were  kept  the 
hospital  fund  and  other  valuables,  the  combination  being  known 
only  to  the  senior  medical  officer  and  the  post  treasurer  and  the 
surgeon  general's  office,  and  while  the  door  of  the  safe  had  been 
carelessly  left  open  by  the  senior  medical  officer  the  bakery  fund 
was  stolen,  held,  that  the  post  treasurer  was  not  required  to 
keep  the  bakery  fund  in  a  bank  and  that  the  placing  of  it  in  the 
safe  was,  under  the  circumstances  of  the  case,  a  proper  care  of 
the  fund.  Held  further,  that  the  fact  that  the  post  treasurer 
had  replaced  the  bakery  fund  from  his  private  fund  immediately 
after  the  loss  occurred,  did  not  prevent  him  from  subsequently 
requesting  relief.  C.  15609,  Dec.  15,  1903.  The  officer  in 
charge  of  athletics  and  amusements  at  a  post,  for  his  own  con- 
venience, sent  a  private  who  was  his  assistant  to  the  post 
exchange  to  cash  a  voucher  for  $18.50.  The  soldier  cashed  the 
voucher  and  deserted  with  the  money.  Held,  that  as  between 
the  officer  and  the  post  exchange  the  loss  should  be  borne  by 
the  officer.  C.  28866,  Aug.  25,  1911.  A- post  exchange  was 
entered  and  robbed  of  a  sum  of  money,  consisting  in  part  of 
that  day's  receipts  and  in  part  of  a  small  and  reasonable  sum 
left  by  the  officer  in  charge  with  the  exchange  steward,  to  make 
change.  Under  paragraph  337,*  Army  Regulations,  1910, 
(par.  4,  G.  O.  46,  A.  G.  O.,  1895),  the  officer  in  charge  is  not 
responsible  for  the  day's  receipts  till  turned  over  to  him  by 
the  steward  on  the  following  morning.  Held,  in  the  absence  of 
any  evidence  of  negligence  or  want  of  precaution  on  his  part, 
that  the  officer  was  not  legally  liable  for  the  amount  of  the 
loss.  P.  58,  437,  Mar.  28,  1893. 

The  field  safe  at  a  post  exchange  was  robbed  at  night,  result- 
ing in  the  loss  of  $127.64  in  cash  belonging  to  the  exchange. 
The  post  exchange  officer  did  not  take  personal  charge  of  the 
cash  accruing  from  the  preceding  day's  business,  but  left  it  with 

'Rescinded. 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    173 

the  exchange  steward,  who  locked  it  in  the  field  safe  "according 
to  custom,"  to  be  turned  over  to  the  post  exchange  officer  the 
next  morning. 

The  post  exchange  regulations  (Par.  3,  G.  O.,  No.  176,  War 
Dept.,  1909)  provide  that: 

"The  exchange  officer  is  in  charge  of  the  exchange  and  is 
responsible  for  its  management.  *  *  *  As  custodian  of 
funds  belonging  to  enlisted  men  he  should  attend  to  all  cash 
transactions  in  person"- 

and  this  regulation  has  been  viewed  by  the  War  Department  as 
requiring  that  the  post  exchange  officer  "should  at  the  close  of 
each  day's  business  check  up  the  steward's  daily  report  of  cash 
and  coupons  received,  and  after  verification  enter  these  data  in 
the  cash  book,  as  well  as  all  other  transactions  involving  cash 
receipts  and  expenditures,  and  deposit  the  cash  on  hand  in  his 
safe."  (Par.  1075,  "A  Guide  for  Inspectors  General,  1911.") 

Held,  that  by  reason  of  his  failure  to  take  personal  charge  of 
the  funds  at  the  end  of  the  day's  business  and  properly  secure 
them,  the  post  exchange  officer  became  responsible  for  the  loss, 

(72-517,  J.  A.  G.,  May  25,  1916.) 

289.  RESPONSIBILITY  FOR  MONEY  COLLECTED 
AT  PAY  TABLE  AND  DUE  TO  AN  EXCHANGE.    Where 
a  company  had  been  temporarily  stationed  near  a  post  which 
maintained  an  exchange  and  the  men  of  the  company  had  been 
allowed  credit  thereat,  but  had  left  the  neighborhood  before 
pay  day  and  subsequently  paid  the  amount  of  their  exchange 
indebtedness  to  the  company  commander.     Held,  that  the  post 
exchange  must  look  to  the  company  commander  for  the  money 
due  it,  and  that  the  fact  that  he  did  not  pay  it  over  could  not 
serve  to  render  the  enlisted  men  liable  for  a  second  payment. 
The  confidence  of  enlisted  men  in  their  superior  officers  should 
not  be  shaken  by  even  the  suggestion  that  where  they  have  in 
good   faith   reposed   confidence   in   such   superior   officer   they 
should  be  told  that  they  did  so  at  their  peril.     C.  29656,  Apr. 
30,  1912. 

290.  POST  NOT  UNDER  COMMAND   OF  DEPART- 
MENT COMMANDER.     Paragraph  318,  Army  Regulations 


174  A  MANUAL  FOB.  POST  EXCHANGES 

of  1908  (321  of  1913)  provided  that:  "In  case  of  loss  of  regi- 
mental, bakery,  exchange,  company,  or  mess  funds,  the  circum- 
stances will  be  carefully  investigated  and  reported  by  the  post 
council,  with  recommendation  as  to  responsibility,  for  the 
decision  of  the  department  commander."  Where  the  loss 
occurred  in  a  post  exchange  on  Alcatraz  Island,  held,  that  as 
the  post  on  that  island  is  not  within  the  command  of  the  depart- 
ment commander,  the  report  should  be  forwarded  by  the  post 
commander  to  The  Adjutant  General  of  the  Army.  C.  % 4,380, 
Feb.  6,  1909. 

291.  DECISION  OF  THE  DEPARTMENT  COMMAN- 
DER:    NO  APPEAL.      Paragraph  317   Army  Regulations, 
1904  (321  of  1913),  in  relation  to  the  loss  of  regimental,  ex- 
change, company,  or  mess  funds  does  not  provide  for  an  appeal 
from  the  decision  of  the  department  commander,  but  where  an 
officer  has  been  held  responsible  for  the  loss  of  funds  and  does 
not  replace  the  funds  of  his  own  motion,  the  question  of  stop- 
page  of   his   pay    arises    and   the    Secretary   of  War,   before 
ordering  a  stoppage  of  his  pay  under  section  1766,  R.  S.,  as 
amended  by  the  act  of  July  16,  1892  (27  Stat.  177),  may  re- 
examine  the  case  to  determine  whether  the  officer  should  be  held 
responsible.     C.  80003,  July  5,  1906. 

292.  REIMBURSEMENT      OF      FUND      FOR      IN- 
DEBTEDNESS.     An   officer   at   the   time   of   his   death   was 
accountable  for  $360  company  fund.     A  board  of  survey  re- 
ported that  he  had  left  in  lieu  of  the  money  an  unindorsed 
Government  check  for  that  amount,  payable  to  his  order  and 
purporting  to  be  for  pay  due  him.     It  thus  appeared  that  the 
officer  owed  the  company  fund  $360,  and  that  the  Government 
owed  him  the  same  amount  for  salary,  the  check  not  having 
been  presented  and  paid.    Advised,  therefore,  that  as  an  officer's 
pay  may  legally  be  stopped  to  reimburse  the  company  fund, 
$360  be  stopped  against  the  pay  due  the  deceased  officer,  and 
that  the  check  referred  to  be  returned  to  the  drawer  to  be 
cancelled.     C.  7957,  Apr.  7,  1900. 


DIGEST  or  OPINION  IN  RELATION  TO  POST  EXCHANGES    175 

293.  GOVERNMENT  AGENCY  MAY  SELL  SUP- 
PLIES TO  AND  RENDER  SERVICE  FOR  THE  GOVERN- 
MENT. Paragraph  593,  Army  Regulations,  1904,  (521  of 
1913),  provide  that  officers  or  agents  in  the  military  service 
will  not  purchase  supplies  for  the  Government  from  any  other 
person  in  the  military  service,  nor  contract  with  any  such 
person  to  furnish  supplies  or  service  to  the  Government,  nor 
make  any  Government  purchase  or  contract  in  which  such 
persons  shall  be  admitted  to  share  or  receive  benefit.  Held, 
that  the  prohibition  of  the  paragraph  is  directed  at  persons 
in  the  military  service,  and  as  the  post  exchange  is  not  a  person, 
but  a  form  of  Government  agency,  the  paragraph  does  not 
apply  to  a  post  exchange.  Held  -further,  that  it  .would  not  be 
unlawful  for  an  exchange  to  repair  a  typewriter  for  the  Signal 
Department,  charging  therefor  a  reasonable  compensation.  C. 
17927,  June  15,  1905.  Also  held,  that  a  post  exchange  laundry 
could  do  laundry  work  for  the  Government.  C.  18156,  Oct.  31, 
1905. 

294  POST  EXCHANGE  CONTRACTING  WITH  THE 
GOVERNMENT  TO  FURNISH  ELECTRIC  LIGHT.  The 

post  exchange  at  a  certain  military  post  operated  for  its  own 
use  a  small  electric  plant  and  furnished  light  to  several  build- 
ings. It  was  desired  to  know  whether  the  exchange  could  be 
paid  for  light  furnished  to  officers  pursuant  to  regulations. 

Held,  that  there  was  no  reason  why  a  post  exchange  might 
not  enter  into  a  contract  with  the  Government  for  furnishing 
electric  current  for  lighting  the  authorized  allowance  of  quar- 
ters for  officers  on  duty  at  the  post.  4,0-0 1^1,  J.  A.  G.,  June  19, 
1913. 

295.  DISPOSITION  OF  FUNDS  OF  GOVERNMENT 
AGENCY  WHERE  AGENCY  CEASES  TO  EXIST.  A 

company  of  a  volunteer  regiment  operated  an  exchange.  After 
the  muster  out  of  the  company  a  debtor  paid  to  one  of  the 
officers  of  the  company  his  indebtedness  to  the  exchange.  Held, 
that  the  profits  from  the  post  exchange  are  considered  as 
belonging  to  the  organization  as  such  and  not  to  the  individual 
enlisted  men  composing  the  organization,  and  therefore  as  the 


176  A  MANUAL  FOR  POST  EXCHANGES 

company  is  no  longer  in  existence  no  attempt  should  be  made 
to  distribute  the  money  among  the  former  members  of  the 
company.  However,  as  the  profit  arose  from  the  savings  of 
enlisted  men,  and  there  would  be  no  legal  objection  to  applying 
them  to  the  company  fund  or  funds  of  one  or  more  companies 
as  may  be  thought  to  best  subserve  the  interests  of  the  Govern- 
ment. C.  11089,  Aug.  29,  1901;  10917,  Jan.  25,  1902.  So 
held  where  an  exchange  was  operated  by  a  large  detachment  of 
recruits  who  were  ordered  away,  leaving  a  surplus  in  the  hands 
of  the  exchange  officer.  C.  13685,  Nov.  12,  1902.  So  where 
a  volunteer  regiment  was  mustered  out,  leaving  in  the  posses- 
sion of  the  colonel  $145  belonging  to  the  regimental  fund,, 
recommended  that  this  sum  be  distributed  among  new  infantry 
regiments  being  organized  for  use  as  a  part  of  their  regimental 
funds.  C.  13616,  Nov.  12,  1902. 

Post  exchanges  are  by  their  nature  intended  to  be  continu- 
ous in  their  operations,  new  organizations  taking  membership 
in  the  exchange  as  the  old  ones  leave,  but  where  an  exchange 
was  entirely  closed  out  and  a  new  one  came  into  existence 
entirely  distinct  and  separate  from  the  old  one,  and  upon  clos- 
ing out  the  affairs  of  the  old  exchange  there  was  a  balance  of 
some  $75  to  be  declared  as  dividends  and  it  appeared  that  the 
new  exchange  had  voluntarily  assumed  certain  debts  of  the  old 
exchange,  the  total  being  unknown,  and  it  appeared  that  a 
period  of  four  years  had  elapsed  since  the  old  exchange  was 
closed  out,  held,  that  it  would  be  proper  to  turn  over  to  the 
new  exchange  the  balance  belonging  to  the  old  one.  C.  17463, 
Feb.  8,  1905. 

A  debt  from  a  deceased  member  of  a  hospital  detachment 
which  belonged  to  the  post  exchange  was  assigned  to  the  sur- 
geon in  command  of  the  detachment  as  a  part  of  the  detach- 
ment dividend.  Subsequently,  and  before  the  debt  could  be 
collected  from  the  estate  of  the  deceased,  the  station  was  aban- 
doned and  the  hospital  detachment  ceased  to  exist,  the  various 
members  being  sent  to  different  stations.  Held,  that  as 
hospital  detachments  do  not  constitute  a  permanent  organiza- 
tion like  companies  a  proper  disposition  to  make  of  the  debt 


DIGEST  or  OPINION  IN  RELATION  TO  POST  EXCHANGES    177 

would  be  to  turn  it  over  to  the  chief  surgeon  of  the  department 
to  be  applied  by  him  to  a  proper  beneficiary.  C.  19321 ,  Mar. 
10,  1906. 

Upon  the  return  of  the  Army  of  Cuban  Pacification  to  the 
United  States  there  remained  unexpended  the  sum  of  $500  in 
a  prison  mess  fund.  This  fund  had  accumulated  from  savings 
on  the  rations  of  military  prisoners  brought  from  all  parts  of 
the  island  of  Cuba.  Recommended,  that  this  sum  be  distributed 
between  the  military  prisons  at  Fort  Jay  and  Fort  Leaven- 
worth.  C.  24686,  Mar.  23,  1909. 

296.  TAXATION    OF    GOVERNMENT   AGENCY.     A 

post  exchange  is  not  legally  liable  for  local  or  municipal  taxes 
or  licenses,  on  the  sale  of  commodities  for  the  exclusive  use  of 
persons  in  the  military  service,  as  such  exchange  is  an  instru- 
mentality of  the  Government  of  the  United  States.  C.  7324, 
Nov.  21,  1899. 

297.  INTERNAL    REVENUE    TAX.     By  the   Act   of 
October  22,  1914,  commonly  known  as  the  war  revenue  act,  it 
was  provided  that : 

"Dealers  in  tobacco whose  annual  receipts 

from  the  sale  of  tobacco  exceed  $200  shall  each  pay  $4.80  for 
each  store,  shop,  or  other  place  in  which  tobacco  in  any  form 
is  sold." 

Held,  that  post  exchanges,  being  Government  agencies,  are 
not  required  to  pay  the  tax.  (Dugan  v.  United  States,  34  Ct. 
Cls.  458.)  (40-100,  J.  A.  G.,  Dec.  30,  1914.) 

The  Act  of  October  22,  1914,  commonly  known  as  the  war 
revenue  act,  enumerates  in  Schedule  B  various  articles  under 
the  heading,  "Perfumeries  and  cosmetics  and  other  similar 
articles,"  which  are  required  to  have  affixed  thereto,  on  each 
container,  an  adhesive  internal  revenue  stamp  of  the  prescribed 
denomination,  and  further  provides  that  such  articles  in  the 
hands  of  dealers  on  and  after  December  1,  1914,  shall  be  sub- 
ject to  the  tax,  but  that : 

"It  shall  be  deemed  a  compliance  with  this  Act  as  to  such 
articles  in  the  hands  of  dealers  on  and  after  December  as  afore- 
said who  are  not  the  manufacturers  thereof  to  affix  the  proper 


178  A  MANUAL  FOR  POST  EXCHANGES 

adhesive  tax  stamp  at  the  time  the  packet,  box,  bottle,  pot,  or 
phial,  or  other  inclosure  with  its  contents  is  sold  at  retail." 

Held,  that  post  exchanges  are  dealers  within  the  meaning  of 
this  provision  of  the  Act  and  are  not  permitted  to  sell  the 
articles  subject  to  the  tax  without  the  prescribed  revenue 
stamps  thereon.  (90-313,  J.  A.  G.,  Dec.  22,  1914.) 

II.     POST  EXCHANGES  IN  PARTICULAR. 

A.     Characteristics  and  Purposes  of  Post  Exchanges. 

298.  GOVERNMENT   AGENCY   AND   RECOGNIZED 
BY  ACTS   OF   CONGRESS.      The   post   exchange   was   not 
established  by  Congress,  but  is  maintained  under  special  regu- 
lations prepared  by  the  War  Department.     It  is  a  Government 
instrumentality  and  has  been  recognized  by  Congresses,  as  for 
instance,  in  the  act  of  June  13,  1890  (26  Stat.  154),  which 
prohibits  the  sale  of  intoxicating  liquors  in  post  exchanges  in 
certain  states,  and  the  act  of  July  16,  1892  (27  Stat.  178), 
which  authorizes  the  use  by  post  exchanges  of  public  buildings 
and  public  transportation  when  not  required  for  other  pur- 
poses.    Congress  has  repeatedly  appropriated  money  for  the 
construction,  equipment,  and  maintenance  of  suitable  buildings 
at  military  posts   and   stations   for  the   conduct   of  post   ex- 
changes.     C.   5394,  Nov.   30,   1890;   12194,  Mar.   12,  1902; 
13104,  Aug.  14,  1902;  15714,  Jan.  18,  1904;  19268,  Mar.  1, 
1906. 

299.  NOT  A  CORPORATION,  BUT  A  CO-OPERATIVE 
STORE.     A  post  exchange  is  not  a  corporation.     It  is  a  co- 
operative association  of  organizations,  etc.,  which  have  paid 
for  their  share  in  the  exchange.     Articles  donated  to  the  ex- 
change are  donated  to  the  association  and  such  articles  should 
be  considered  as  part  of  the  assets  of  the  exchange,  to  be  turned 
over,  or  accounted   for,  by  its  members   to   their   successors. 
P.  65,  127,  May  26,  1894.     A  post  exchange  is  a  voluntary 
unincorporated  association  between  various  military  organiza- 
tions.   It  is  a  joint  venture  to  form  a  kind  of  cooperative  store. 
C.  27964,  Mar.  6,  1911. 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    179 

B.  Post  Exchange  Officer. 

300.  ALLOWANCE  FOR  SERVICES.     Held,  that  there 
is  no  legal  objection  to  an  allowance  to  the  post  exchange  officer 
out  of  the  exchange  funds,  to  offset  in  a  measure  the  pecuniary 
risk  which  he  is  obliged  to  take.     C.  3108,  Apr.  15,  1897. 

301.  LITIGATION    ON    BEHALF    OF    THE     POST 
EXCHANGE.     As  a  post  exchange  is  not  a  corporation  but 
a  voluntary  association  of  organizations  and  the  business  is 
carried  on  by  an  officer  of  the  Army  detailed  for  that  purpose 
who   has   full  charge   and   represents   the   exchange   in   all  its 
transactions,  held,  that  litigation  on  behalf  of  the  post  exchange 
should  be  in  the  name  of  the  exchange  officer  as  exchange  officer 
and  on  behalf  of  the  exchange.     C.  19268,  Mar.  1,  1906. 

302.  EMPLOYMENT   OF   COUNSEL.     As   a   post   ex- 
change is   an  instrumentality   of  the   Government,   the   duties 
imposed  on  an  officer  in  the  management  of  the  affairs  of  the 
exchange  are  as  binding  upon  him  as  is  any  other  duty  to 
which  he  may  be  detailed  under  competent  military  authority. 
Therefore,  if  in  the  performance  of  his  duties  as  an  exchange 
officer  it  is  necessary  for  him  to  have  legal  advice,  he  may 
properly    apply   under   paragraph    1005,    Army   Regulations 
(996  of  1913),  for  such  legal  advice,  and  in  a  proper  case 
request  will  be  made  upon  the  Department  of  Justice  for  the 
assistance  of  the  proper  United   States   attorney.      So,   held, 
where  a  post  exchange  contemplated  bringing  an  action  against 
a  corporation  for  the  price  of  certain  articles  sold  to  the  ex- 
change.    C.  19268,  Mar.  1,  1906.     So  where  a  so-called  com- 
pany exchange  was  carried  on  at  a  post  by  the  consent  of  the 
commanding  officer,  although  such  exchange  was  not  authorized 
by  law  or  regulations,  and  an  action  was  brought  against  indi- 
vidual officers  for  the  debts  of  the  concern,  held  that,  owing  to 
the  fact  that  the  exchange  had  existed  by  the  authority  of  the 
commanding  officer  and  owing  to  other  peculiar  circumstances 
of  the  case,  it  would  be  proper  for  the  officers  sued  to  request 
to  be  provided  by  the  Government  with  counsel.     C. 

Apr.  20,  1907. 


180  A  MANUAL  FOR  POST  EXCHANGES 

303.  NOT  PERSONALLY  RESPONSIBLE  TO  CREDI- 
TORS OF  THE  EXCHANGE.    Paragraph  3,  page  8,  General 
Orders,  176,  War  Department,  August  14,  1909,  which  pub- 
lishes the  regulations  for  the  post  exchange,  provides :     "The 
management  of  the  affairs  of  the  exchange  will  be  conducted  by 
an  officer  designated  'Exchange  Officer,'  selected  and  detailed 
by  the  commanding  officer.     The  exchange  officer  is  in  charge 
of  the  exchange  and  is  responsible  for  its  management."    Held, 
that  the  above  language  did  not  necessarily  make  an  exchange 
officer   personally    responsible   to    an   unpaid    creditor    of   the 
exchange,  the  creditor  not  having  been  paid  at  the  time  the 
affairs  of  the  exchange  were  closed.     An  exchange  officer  might 
become  personally  responsible  to  a  creditor  of  an  exchange  if 
he   assumed   personal   responsibility   for   the   debt,   or   by   his 
conduct  had  caused  the  creditor  to  lose  his  right  to  recover 
from  the  exchange.     C.  27964,  Mar.  6,  1911. 

304.  RESPONSIBILITY    FOR    SHORTAGE    IN    EX- 
CHANGE  FUNDS.      A   post   exchange   officer,   having  been 
charged  with  embezzlement  of  the  exchange  funds,  made  good 
the  shortage.      Having  been   acquitted  of  the  charge,  he  re- 
quested that  the  amount  paid  by  him  to  make  good  the  shortage 
be  refunded.     Held,  that  the  finding  of  the  court  martial  had 
solely  to  do  with  the  officer's  culpability  from  the  point  of  view 
of   discipline,    that    the    acquittal    did    not    relieve    him    from 
financial  responsibility,  and  that  the  amount  paid  by  him  to 
make  good  the  shortage  should  not  be  refunded.     C.  17944* 
May  5,  1905. 

C.     Limitations  as  to  Business. 

305.  CAN    NOT    ACCEPT    DEPOSITS    FROM    EN- 
LISTED MEN.     As  the  doing  of  a  general  banking  business 
is    not    among   the    purposes    for   which    a    post    exchange    is 
established,  held,  that  it  would  not  be  authorized  to  accept  from 
a  soldier  a  deposit  for  safe  keeping.     C.  11155,  Aug  31,  1901. 

306.  CAN  NOT  COLLECT  TAX  ON  DOGS  IN  POST. 

Where  it  was  proposed  at  a  military  post  to  authorize  the  post 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    181 

exchange  to  collect  funds  accruing  from  a  tax  on  dogs  in  the 
post  to  be  levied  by  the  post  commander,  the  purpose  being 
to  limit  the  number  of  dogs  at  the  post,  held,  that  as  such  a  tax 
constituted  an  important  restriction  upon  the  military  and 
police  administration  at  the  post  and  does  not  come  clearly 
within  the  scope  and  meaning  of  the  orders  and  regulations 
governing  the  sources  of  revenue  that  post  exchanges  may 
avail  themselves  of,  recommended  that  the  proposed  tax  be  not 
authorized.  C.  87317,  Sept.  30,  1910. 

307.  COMPETITION  WITH  COMMERCIAL  HOUSES. 

Applying  the  same  principle  (one  department  of  the  govern- 
ment securing  supplies  or  service  from  another  at  cost  price) 
to  the  operations  of  a  post  exchange  (which  is  an  instrumen- 
tality of  the  United  States),  a  post  hospital  could  properly 
contract  without  advertisement  to  have  the  hospital  laundry 
work  done  at  the  post-exchange  laundry.,  and  on  the  other 
hand,  as  the  post  exchange  is  not  a  legal  entity,  and  is  exempt 
from  burdens  borne  by  private  commercial  institutions,  such  as 
rent,  taxes,  license  fees,  etc.,  it  would  be  improper  for  it  to 
compete  with  other  bidders  for  public  supplies  or  services. 
C.  18156,  Oct.  31,  1905. 

D.     Credits  by  Post  Exchange. 

308.  TO  OFFICERS.     It  is  well  settled  that  a  reasonable 
credit  may  be  given  to  an  officer  by  the  post  exchange  for  pur- 
chases made.     C.  20869,  J<m.  11,  1907. 

309.  TO    ENLISTED    MEN.     An    indebtedness    from    a 
soldier  may  be  collected  on  the  pay  rolls  or  final  statement 
notwithstanding   the   fact   that    such   indebtedness   may   have 
resulted  from  giving  the  soldier  a  credit  with  the  exchange  in 
excess  of  that  authorized  by  the  regulations.     C.  10298,  Mar. 
18,  1911.    And  where  a  post  exchange  suffered  a  loss  by  reason 
of  the  fact  that  an  officer  failed  to  charge  against  a  soldier  on 
the  pay  rolls  a  debt  owing  the  exchange  by  a  soldier,  held,  that 
the  officer  should  make  good  the  loss  to  the  post  exchange  not- 
withstanding the  indebtedness  of  the  soldier  to  the  post  ex- 


182  A  MANUAL  FOR  POST  EXCHANGES 

change  was  in  excess  of  the  credit  authorized  by  the  exchange 
regulations.  C.  14828,  Dec.  26,  1903. 

E.     Liability  for  Debts  of  Post  Exchange. 

310.  OFFICERS  IN  GENERAL.     As  the  membership  of 
a  post  exchange  consists  of  organizations,  companies,  or  de- 
tachments of  enlisted  men,  and  as  officers  are  not  eligible  to 
membership,  held,  that  the  officers  of  a  post  at  which  a  post 
exchange  is  located  are  not  liable  for  its  debts.      C.  19533, 
Jan.  7, 1911. 

311.  OF   EXCHANGE   COUNCIL   AND   EXCHANGE 
OFFICER.    Where  an  exchange  has  suffered  a  loss,  all  officers 
responsible  for  such  loss  should  be  held  for  it.     For  instance, 
where  losses  extending  over  a  period  of  two  years  were  caused 
by  neglect  and  mismanagement,  held,  that  the  post  exchange 
council  as  well  as  the  exchange  officer  should  be  held  responsible 
for  it.     C.  26516,  Apr.  14,  1910.     So,  held,  where   for   six 
months  the  exchange  officer  and  post  exchange  council  failed 
to  take  steps  to  compel  payment  of  an  indebtedness  of  $54.39 
owing  by  an   officer  and  the  officer  resigned   from  the  Army 
without  having  paid  the  debt.     C.  20869,  Jan.  11,  1907. 

312.  SHORTAGE  IN  ACCOUNTS ;  RESPONSIBILITY. 

Upon  an  examination  of  the  accounts  of  a  certain  post  ex- 
change the  Inspector  General's  Department  found  a  shortage 
in  the  accounts  for  each  month  for  the  period  from  August  1, 
1913,  to  June  15,  1914,  aggregating  $655.84.  The  accounts 
had  not  been  kept  in  accordance  with  the  requirements  of  the 
post  exchange  regulations  and  it  was  evident  that  the  loss 
might  readily  have  been  detected  by  proper  auditing  of  the 
accounts  by  the  members  of  the  post  exchange  council,  as  re- 
quired by  regulations.  During  the  period  mentioned  the  post 
exchange  council  took  no  inventory  of  the  stock,  notwith- 
standing the  requirements  of  the  regulations  that  such  inven- 
tory be  taken  by  them  quarterly  or  oftener. 

Held,  that  post  exchanges  being  agencies  of  the  Government, 
the  duties  imposed  upon  officers  in  the  management  of  their 
affairs  are  as  binding  upon  them  as  any  other  duty  to  which 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    183 

they  may  be  assigned  under  competent  military  authority ;  that 
when  the  property  or  funds  of  an  exchange  are  lost  through 
mismanagement  or  neglect  of  such  officers  the  least  that  can 
or  should  be  exacted,  in  the  public  interests,  is  that  they  make 
good  the  loss ;  that  this  principle  applies  as  well  to  members  of 
an  exchange  council  as  to  the  exchange  officer ;  and  that  in  the 
instant  case  it  was  the  duty  of  the  Department,  in  the  public 
interests,  to  direct  the  entry  of  stoppages  against  the  pay  of 
the  several  members  of  the  exchange  council  and  of  the  exchange 
officer,  in  equal  sums,  to  cover  the  shortage.  (40-100,  J,  A.  G.y 
Feb.  24,  1915.) 

F.     Post  Exchange  Buildings. 

313.  CONSTRUCTION  OF  BUILDINGS.  The  Post 
Exchange  Regulations  of  May  1,  1899,  provided  that  the  post 
commander  "when  sufficient  exchange  funds  are  available  may 
cause  a  suitable  building  to  be  erected  for  the  purpose,  and  if 
a  temporary  building,  or  if  constructed  wholly  or  in  part  by 
the  labor  of  troops,  use  of  the  necessary  teams  and  such  tools, 
window  sash,  doors,  and  other  material  as  can  be  spared  by 
the  Quartermaster's  Department  is  authorized,  but  no  perma- 
nent structure  will  be  erected  on  a  reservation  without  first 
obtaining  the  authority  of  the  Secretary  of  War.  Expenses 
of  repairs  or  alterations  of  public  buildings  for  use  of  the 
exchange  will  be  borne  by  the  exchange  when  they  can  not  be 
provided  for  by  the  Quartermaster's  Department."  Where  a 
post  -exchange  building  at  Fort  Egbert,  Alaska  was  erected  by 
authority  of  the  Secretary  of  War  without  cost  to  the  Govern- 
ment, except  that  the  doors,  windows,  nails,  and  chimney  tiles 
were  furnished  by  the  Quartermaster's  Department,  held,  that 
the  building  did  not  become  the  property  of  the  Government 
by  reason  of  furnishing  the  doors,  etc.,  but  became  an  asset  of 
the  exchange  and  should  be  so  treated,  subject  to  the  claim  of 
the  Government  for  the  doors,  etc.  C.  10034,  Oct.  15,  1901. 
Where  a  building  was  erected  on  a  reservation  without  the 
authority  of  the  Secretary  of  War  as  an  addition  to  a  public 
building  which  had  been  set  aside  for  the  use  of  the  post 


184  A  MANUAL  FOR  POST  EXCHANGES 

exchange,  held,  that  the  addition  so  erected  without  authority 
became  the  property  of  the  United  States.  C.  10305,  May  14, 
1901.  Where  a  building  was  erected  by  a  post  exchange  under 
a  license  by  the  Secretary  of  War,  held,  that  if  the  license  was 
revoked  and  the  building  could  be  removed  so  as  to  realize  an 
amount  in  excess  of  the  damage  to  the  reservation  and  other 
property  of  the  United  States,  the  removal  of  the  building  should 
be  permitted,  but  if  this  could  not  be  done  the  building  should  be 
held  to  be  the  property  of  the  United  States.  C.  10305,  May 
14,  1901. 

G.     Appropriations  for  Post  Exchanges. 

314.  HOW  EXPENDED.  The  appropriation  for  post 
exchanges,  which  provides  for  the  "construction,  equipment, 
and  maintenance  of  suitable  buildings  at  military  posts  and 
stations  for  the  conduct  of  the  post  exchange,  school,  library, 
reading,  lunch,  amusement  room  and  gymnasium,"  and  which 
is  expended  "in  the  discretion  and  under  the  direction  of  the 
Secretary  of  War,"  being  intended  to  serve  a  very  broad  pur- 
pose, should  be  liberally  construed,  and  is,  therefore,  held  to 
cover  the  construction  of  fences,  grand  stand,  seats,  etc.,  for 
an  athletic  field  (C.  14970,  May  13,  1907);  the  laying  out  of 
golf  links  at  a  post  (C.  14970,  Dec.  8,  1908);  the  purchase  of 
apparatus  for  outdoor  as  well  as  indoor  athletics  (C.  14970, 
Jan.  30,  1909);  the  expense  of  constructing  a  fence  for  a  deer 
park  (C.  22337,  Nov.  7,  1907);  and  could  legally  be  expended 
for  the  purchase  from  a  post  exchange  of  a  building  erected  by 
it  for  post  exchange  purposes  (C.  13365,  Sept.  29,  1902; 
15026,  July  29,  1903;  26607,  Apr.  29,  1910).  But  as  the 
appropriation  is  for  buildings,  held,  that  it  would  not  cover 
an  expenditure  for  a  tent  in  which  to  quarter  temporarily  the 
post  exchange  during  Army  maneuvers  (C.  25057,  June  5, 
1909),  nor  would  it  cover  the  purchase  of  polo  balls  and 
mallets  (C.  25575,  Sept.  17,  1909),  and,  as  the  post  exchange 
is  intended  to  be  a  local  institution  belonging  to  a  post,  and 
not  to  move  about  with  troops,  held  that  the  appropriation 
would  not  cover  an  expenditure  for  a  tent  that  was  intended  to 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    185 

be  a  part  of  the  movable  equipment  of  a  regiment.  C.  27950, 
Mar.  6,  1911.  And,  held,  also,  that  although  the  Government 
appropriates  for  the  construction  of  the  post  exchange  build- 
ing, still  as  the  exchange  itself  is  an  instrumentality  of  the 
Government  composed  of  military  units,  for  which  Congress 
makes  no  appropriation  whatever,  such  items  as  a  safe  and  a 
cash  register  which  are  not  part  of  the  equipment  of  the  build- 
ing, but  are  rather  the  equipment  of  a  commercial  enterprise 
conducted  in  the  building,  should  be  furnished  by  the  post 
exchange  itself,  and  are  not  a  proper  charge  against  the  appro- 
priation. C.  20299,  Aug.  29,  1906.  As  the  post  exchange 
is  an  agency  of  the  War  Department,  maintained  for  the  benefit 
of  enlisted  men,  and  as  the  profits  derived  from  its  operation 
are  exclusively  applied  to  their  company  fund,  the  appropria- 
tion for  the  support  of  post  exchanges  should  be  expended  for 
the  exclusive  benefit  of  enlisted  men.  C.  14970,  May  4,  1910. 
Therefore,  this  appropriation  should  not  be  expended  for  the 
laying  out  of  golf  links  unless  for  the  exclusive  use  of  enlisted 
men.  C.  14970,  Dec.  8,  1908.  So,  also,  it  could  not  be 
expended  for  furniture  for  an  officer's  mess.  C.  15674,  Dec.  18, 
1903. 

H.     Membership  and  Dividends. 

315.  MEMBERSHIP  CONTINUOUS  REGARDLESS 
OF  PERSONNEL.  In  1896  a  dividend  was  due  the  organiza- 
tions constituting  a  post  exchange,  but  was  not  paid  because 
the  bank  in  which  the  money  was  deposited  suspended  payment. 
In  1903  the  bank  resumed  payment  and  a  new  certificate  of 
deposit  was  issued  in  favor  of  the  officer  who  was  exchange 
officer  at  the  date  of  the  bank's  suspension.  Held,  that  as  the 
companies  were  continuing  organizations  the  dividends  due 
them  in  1896  should  be  paid  to  them.  C.  14928,  July  8,  1903. 
So,  in  1900,  the  post  exchange  at  Ponce,  P.  R.,  was  indebted 
to  the  post  exchange  at  San  Juan,  P.  R.,  but  failed  to  pay  the 
debt  and  the  organizations  at  both  stations  were  ordered  away. 
In  1903  it  was  held  that  as  a  company  fund  is  a  continuing 
fund  and  does  not  depend  upon  the  personnel  of  the  company, 


186  A  MANUAL  FOR,  POST  EXCHANGES 

and  as  it  belongs,  not  to  the  individual  members  of  a  company 
but  to  the  company  as  a  unit,  the  companies  constituting  the 
Ponce  exchange  in  1900  should  pay  to  the  organizations  com- 
prising the  San  Juan  exchange  in  1900  the  amount  of  the 
indebtedness  of  the  Ponce  exchange  at  that  time.  C.  154,28, 
Oct.  %7,  1903.  Where  a  post  exchange  officer  was  required 
over  his  protest  to  pay  out  of  his  private  funds  for  certain 
supplies  ordered  furnished  and  used  by  the  post  exchange,  and 
the  organizations  constituting  the  exchange  had  been  ordered 
to  another  station  and  the  exchange  was  dissolved,  held,  that 
as  an  exchange  is  a  voluntary  unincorporated  association  be- 
tween various  military  organizations  and  constitutes  a  joint 
venture  to  form  a  kind  of  cooperative  store,  the  various  organi- 
zations comprising  it  are  liable  to  third  parties  for  obligations 
incurred  on  account  of  the  joint  business.  Ordinarily  the 
liabilities  incurred  on  the  j  oint  account  are  extinguished  by  the 
post  exchange  itself,  but  if  in  a  particular  case,  such  as  the 
present,  it  is  impracticable  to  have  the  exchange  pay  the  obliga- 
tion, the  several  organizations  comprising  it  would  still  remain 
liable  as  individual  partners  remain  liable  for  partnership  debts 
after  the  dissolution  of  a  partnership.  Therefore,  recom- 
mended, that  the  post  exchange  officer  be  reimbursed  for  his 
involuntary  payment  by  the  several  organizations  comprising 
the  exchange  at  the  time  the  indebtedness  was  incurred.  C. 
£7964,  Mar.  6,  1911,  and  Oct.  3,  1911. 

316.  APPRAISEMENT  OF  EXCHANGE  ON  CHANGE 
OF  MEMBERSHIP.  Prior  to  the  admission  of  a  new  organi- 
zation to  an  established  post  exchange,  a  board  of  officers,  as 
required  by  exchange  regulations,  made  an  examination  of  the 
affairs  of  the  exchange  and  adjusted  the  accounts  and  values. 
No  appeal  was  taken  from  the  findings  of  the  board  to  the 
department  commander.  Subsequently  it  was  discovered  that 
some  of  the  bills  due  the  exchange  were  valueless  and  some  bills 
due  by  the  exchange,  the  existence  of  which  were  not  known 
before,  were  presented  for  payment.  Held,  that  questions  as 
to  liability  of  members  of  an  exchange  should  be  considered 
as  finally  determined  by  the  action  provided  by  exchange  regu- 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    187 

lations  except  in  cases  where,  after  a  settlement,  fraud  is 
alleged  or  facts  are  discovered  bearing  on  the  value  of  the 
membership  in  the  exchange  which  were  not  known  at  the  time 
the  values  were  adjusted  and  which  were  not  known  to  those 
having  the  adjustment  in  charge.  In  such  an  exceptional  case 
it  would  be  proper  for  the  department  commander  to  appoint 
a  board  to  investigate  the  facts  and  recommend  equitable  settle- 
ment. C.  19178,  Feb.  9,  1906.  Held,  further,  that  it  was  the 
intent  of  the  exchange  regulations  that  the  action  of  the 
department  commander  should  be  final  and  that  such  cases 
should  not  be  forwarded  to  higher  authority.  C.  19^48,  Mar.  6, 
1906. 

317.  DISTRIBUTION    OF    DIVIDENDS.     A    hospital 
corps  detachment  bought  into  the  post  exchange  on  a  basis  of 
12  men  in  the  detachment.     The  number  of  men  having  been 
reduced  to  6,  the  dividends  of  the  exchange  were  distributed 
to  the  detachment  on  the  basis  of  6.    Held,  that  although  mem- 
bership in  an  exchange  is  by  organization,  the  exchange  regu- 
lations take  into  consideration  the  size  of  the  organization,  the 
size  on  joining  being  taken  from  the  number  of  men  present 
at  the  time  of  joining,  whereas  the  dividends  are  calculated  on 
the  basis  of  the  whole  number  of  men  who  have  been  present 
with  the  organization  during  the  period  covered  by  the  dis- 
tribution.    Therefore,  the  method  of  distribution  on  the  basis 
of  six  was  in  accordance  with  the  exchange  regulations.     C. 
80043,  July  11,  1906. 

318.  ENGINEER  DETACHMENT:    DISTRIBUTION 
OF  THE  PROFITS  OF  POST  EXCHANGE  AFTER  THE 
ACT  OF  AUGUST  9,  1912.     General  Orders  provide  that  a 
certain   amount   of   the   profits   of  a   post   exchange   shall  be 
distributed : 

"2.     Where  the  members  belong  to  the  Corps  of  Engineers 
it  will  be  paid  to  the  Engineer  Band. 
*######### 

"4.  Where  the  members  belong  to  organizations  having  no 
band,  it  will  be  paid  to  the  band  serving  at  the  post  if  there  be 
one,  otherwise  to  such  members." 


188  A  MANUAL  FOR,  POST  EXCHANGES 

The  act  of  August  9,  1912  (Public  No.  253,  p.  3),  appro- 
priating for  the  Military  Academy  for  the  fiscal  year  1913, 
provides  that — "Hereafter  there  shall  be  maintained  at  the 
United  States  Military  Academy  an  engineer  detachment  which 
shall  consist  of" — a  certain  number  of  noncommissioned  officers 
and  privates. 

Held,  that  such  detachment,  although  retaining  its  character 
of  engineer  troops,  becomes  an  independent  organization  per- 
taining to  the  Military  Academy  alone  and  removed  from  the 
Corps  of  Engineers  as  a  part  of  that  organization;  and  not 
having  a  band,  its  proportion  of  the  profits  of  the  post  ex- 
change, coming  within  the  operation  of  said  General  Orders, 
should  be  paid  to  the  band  serving  at  the  post.  8-140,  Aug.  24, 
1912. 

319.  WITHDRAWAL    OF    MEMBERS    FROM:    AP- 
PRAISAL    OF     SHARES     AND     PARTICIPATION     IN 
PROFITS.     A  regiment  stationed  at  a  post  where  there  was 
a  post  exchange,  in  which  its  constituent  organizations  held 
membership,  was  under  orders  to  go  to  the  Philippines,  and  the 
value  of  the  shares   of  the  respective   organizations  was   ap- 
praised by  a  board  as  of  date  August  25,  1911.     The  board 
further  recommended  that  the  regimental  organizations  be  paid 
their  share  of  accrued  profits  to  the  date  of  their  departure 
from  the  post.     This  recommendation  was  not  approved  by  the 
exchange  council,  and  the  commander  concurred  in  its  action. 
Held,   that   the   organizations   of  the   regiment   ceased   to   be 
be  members  of  the  exchange  after  August  25,  1911,  and  were 
not  responsible  for  the  debts  of  the  exchange  nor  entitled  to 
share  in  its  profits  after  that  date,  and  that  the  recommendation 
of  the  board  of  appraisers  was  simply  advisory  and  did  not 
deprive   the  exchange   council   of  its   authority   to    determine 
whether  or  not  the  organizations  of  the  regiment  should  par- 
ticipate in  the  profits  of  the  exchange  after  said  date.     40-14*2, 
Sept.  28,  1912. 

320.  VOLUNTEER  BAND  AT  POST.     Where  a  "volun- 
teer band"  was  organized  at  a  military  post  by  soldiers  volun- 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    189 

tarily  associating  themselves  for  that  purpose,  the  band  not 
being  one  recognized  by  the  statutes  or  regulations,  but  furnish- 
ing martial  music  for  the  post,  held,  that  it  would  be  proper  to 
apply  a  portion  of  the  profits  of  the  post  exchange  for  the 
support  of  the  band.  C.  14893,  July  1,  1903.  A  "volunteer 
band"  is  not  entitled  to  share  in  the  allotment  of  5  per  cent  of 
the  net  profits  of  a  post  exchange.  C.  23870,  May  24,  1911. 

I.     Miscellaneous. 

321.  INDEPENDENT  AND  BRANCH  EXCHANGES 
AT  THE  SAME  POST.     As  post  exchanges  are  created  by 
orders  there  is  no  legal  objection  to  the  establishment  of  one 
exchange  with  several  branches  at  a  military  post,  or  to  the 
establishment   of   several   independent   exchanges   at   the   same 
post,  as,  for  instance,  several  regimental  exchanges.     C.  27345* 
Oct.  11,  1910. 

322.  READJUSTMENT  OF  ACCOUNTS  WITH  PAY- 
MASTER.    A  soldier's  final  statement  which  had  been  trans- 
ferred to  a  post  exchange  was  cashed  by  a  paymaster.     It  was 
subsequently  discovered  that  the  paymaster  had  overpaid  the 
post  exchange.     By  the  time  the  discovery  was  made  the  mem- 
bership of  the  post  exchange  had  changed.     Held,  that  as  the 
post  exchange  is  an  instrumentality  of  the  Government  and  a 
part  of  the  military  system  of  administration,  the  accounts 
between  the  paymaster  and  the  post  exchange  could  be  ordered 
to  be  readjusted.     C.  24167,  Dec.  2,  1908. 

323.  PROCEEDINGS   OF   THE   EXCHANGE   COUN- 
CIL.   Paragraph  318,  Army  Regulations,  1910,  (318  of  1913) 
provides  that  the  proceedings   of  the  post  exchange   council 
will  be  submitted  to  the  post  or  other  commander,  who  will 
sign  his  approval  or  objection  in  the  council  book,  and  that 
should  the  post  or  other  commander  disapprove  the  proceed- 
ings, and  the  council,  after  reconsideration,  adhere  to  its  con- 
clusions, a  copy  of  the  proceedings  will  be  sent  by  the  command- 
ing officer  to  the  department  commander,  whose  decision  thereon 
will  be  final.     Held,  that  the  "proceedings"  referred  to  by  this 


190  A  MANUAL  FOR  POST  EXCHANGES 

paragraph  is  the  record  of  the  action  taken  by  a  majority  of 
the  council,  and  it  is  upon  this  record  that  the  post  or  other 
commander  must  note  his  approval  or  disapproval,  as  the  case 
may  be.  While  there  can -be  no  objection  to  a  minority  report 
being  appended  to  the  proceedings  of  the  council,  such  minority 
report,  however,  represents  merely  the  personal  views  of  the 
minority  and  is  not  the  "proceedings"  to  be  approved  or  dis- 
approved. Therefore,  where  the  action  taken  by  the  post  com- 
mander consisted  in  the  approval  of  the  minority  report,  held, 
that  it  did  not  constitute  a  compliance  with  the  above  regula- 
tions. C.  29268,  Nov.  28,  1911. 

324.  REGIMENTAL     ADJUTANT     MAY    RECEIPT 
FOR  EXCHANGE  FUNDS  ON  DEATH  OF  EXCHANGE 
OFFICER.      At   the  time   a  bank  went  into   the  hands   of   a 
receiver  it  had  funds  on  deposit  in  the  name  of  the  regimental 
exchange   officer.      Before   a   dividend  was   declared  this   post 
exchange  officer  died.     Held,  that  it  would  be  proper  for  the 
regimental  adjutant  to  receive  and  receipt  for  the  dividends. 
C.  16517,  June  £8,1904.. 

325.  TRANSFER    OF    GOVERNMENT    PROPERTY 
TO  POST  EXCHANGES  AT   COST  PRICES.     Post   ex- 
changes,  having   been   recognized   by    statute    as    Government 
agencies,   a  bureau   of  the  Government  may  legally  transfer 
property  to  the  post  exchange  at  cost  price.     C.  20993,  Jan. 
26,  1907. 

326.  TELEGRAMS    OVER    GOVERNMENT    LINES. 

The  cost  of  telegraphic  messages  over  the  lines  of  commercial 
companies  on  exchange  business  does  not  constitute  a  lawful 
charge  against  the  appropriations  for  the  payment  of  tele- 
grams on  public  business,  but  as  the  post  exchange  is  an 
instrumentality  of  the  Government,  such  messages  should  be 
transmitted  free  over  lines  owned  and  operated  by  the  War 
Department.  C.  19479,  Mar.  26,  1910. 

327.  OVERPAYMENT    ON    FINAL   STATEMENTS. 
A  discharged  soldier  transferred  his  final  statements  to  a  post 
exchange  officer,  who  thereupon  advanced  him  from  the  post 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    191 

exchange  funds  $75  and  forwarded  the  statements  to  a  pay- 
master. Upon  receipt  from  the  paymaster  of  a  check  for 
$102.79  in  payment  of  the  final  statements,  the  post  exchange 
officer  remitted  $27.50  to  the  discharged  soldier,  retaining 
29  cents  to  cover  postage,  registration  fee,  and  cost  of  money 
order.  Five  months  later  the  paymaster  discovered  that  he 
had  made  an  overpayment  through  his  own  error  in  computa- 
tion, and  called  upon  the  post  exchange  to  reimburse  him  on 
the  ground  that  it  had  received  public  money  to  which  it  was 
not  entitled.  The  post  exchange  disallowed  the  claim,  setting 
forth  in  its  proceedings  that  "the  post  exchange  is  expressly 
debarred  from  making  any  profit  by  these  transactions,  ex- 
change officers  being  required  to  certify  on  each  of  the  state- 
ments that  they  were  cashed  as  a  matter  of  accommodation  to 
the  soldier  and  without  profit  to  the  post  exchange ;  that  in 
consequence  it  has  been  the  custom  to  make  an  advance  or  par- 
tial payment  to  the  men  and  upon  receipt  of  the  paymaster's 
check  to  make  final  settlement;  that  the  Government  does  not 
furnish  the  exchange  officer  with  any  facilities  for  making 
computations  in  these  cases,  and  hence  he  is  obliged  to  regard 
the  paymaster's  check  in  settlement  as  officially  accurate  and 
final."  Held,  that  the  loss  should  not  fall  on  the  post  exchange, 
as  under  the  circumstances  it  acted  simply  as  the  agency 
through  which  payment  was  made  by  the  paymaster  to  the 
soldier  and  was  in  no  way  responsible  for  the  error.  The  soldier 
and  not  the  post  exchange  was  the  debtor  to  whom  the  pay- 
master .  should  look  for  reimbursement  for  the  overpayment. 
The  error  having  been  made  by  the  paymaster  the  loss  should 
fall  on  him  under  Army  Regulations,  665  (654  of  1913).  C. 
7589,  Jan.  28,  1900. 

328.  FRAUD  COMMITTED  BY  EXCHANGE  STEW- 
ARD IN  THE  MANAGEMENT  OF  AN  EXCHANGE  A 
MILITARY  OFFENSE.  The  post  exchange  is  a  part  of  the 
administrative  machinery  of  the  Army  established  by  Army 
Regulations,  which  have  the  force  of  law.  A  fraud  committed 
by  the  steward  of  a  post  exchange  in  its  management  is,  there- 
fore, clearly  a  military  offense.  C.  5255,  Nov.  15,  1898. 


192  A  MANUAL  FOR  POST  EXCHANGES 

329.  FUEL  AND  LIGHT.      Held,  that  the  appropriation 
in  an  Army  appropriation  act,  "for  fuel  and  lights  for  enlisted 
men,"  included  the  fuel  and  lights  required  at  a  canteen,  since 
thus  used  they  are  for  "enlisted  men,"  almost  if  not  quite  so 
much  as  when  used  in  their  places  of  messing  and  sleeping. 
But  as  the  act  authorizes  a  sale  of  articles  for  fuel  or  light  for 
cash  to  "officers"  only,  a  sale  could  not  be  made  to  a  canteen. 
Even  though  the  official  in  charge  of  a  canteen  is  a  commis- 
sioned officer,  a  sale  to  him  of  such  material  would  not  be  for 
his  use  but  for  that  of  the  canteen  and,  therefore,  unauthorized. 
P.  51,  239,  Jan.  7,  1892.    Paragraph  1051,  Army  Regulations 
of  1904  (1060  of  1910),  provided  that  the  allowance  of  fuel 
to  be  issued  to   a  post  exchange  should  be  such  quantity  as 
might  be  certified  to  by  the  officer  in  charge  and  approved  by 
the  commanding  officer.    Held,  that  the  regulation  would  apply 
to  a  post  exchange  which  maintains  a  laundry  as  well  as  to 
one  which  does  not.     C.  Q1521,  May  13,  1907. 

330.  LEASING      OF      PORTIONS      OF      MILITARY 
RESERVATIONS  FOR  THE  BENEFIT  OF  POST  EX- 
CHANGES.     Portions    of   a   military   reservation   had   been 
leased  upon  shares  to  private  individuals,  the  rental  in  kind 
to  be  turned  over  to  the  post  exchange  of  the  post,  to  be  used 
by    said    exchange    in    maintaining    a    dairy    and    for    feeding 
animals,  including  a  small  number  of  hogs.     It  was  the  inten- 
tion to  increase  the  number  of  cows  so  that  the  dairy  would  be 
able  to  supply  organizations  and  individuals  with  dairy  pro- 
ducts, and  also  to  increase  the  herd  of  hogs  so  as  to  supply 
organizations  with  meat. 

Held,  that  while  it  has  been  the  practice  to  permit  military 
organizations  to  cultivate  limited  areas  of  reservations  to 
supplement  the  rations  furnished  by  the  Government  for  the 
subsistence  of  enlisted  men,  it  has  not  been  the  practice  to  lease 
Government  lands  under  agreements  providing  for  rental  in 
kind  and  permitting  the  appropriation  of  the  rentals  by  such 
organizations ;  and  that  the  facts  in  this  case  disclosed  the 
necessity  for  restricting  the  activities  of  post  exchanges  in 


DIGEST  OF  OPINION  IN  RELATION  TO  POST  EXCHANGES    193 

business    enterprises    within    more    limited    bounds.     40-100, 
J.  A.  G.,  Oct.  6,  1913. 

331.  RETIRED  OFFICER:  ASSIGNMENT  OF  TO 
ACTIVE  DUTY  AS  EXCHANGE  OFFICER.  A  retired 
Army  officer  expressed  a  desire  to  be  assigned  to  active  duty 
as  post  exchange  officer  at  a  post  where  troops  were  serving. 
The  act  of  April  23,  1904  (33  Stat.,  264),  provides  that: 

"The  Secretary  of  War  may  assign  retired  officers  of  the 
Army,  with  their  consent,  to  active  duty  in  recruiting, 

and  to  staff  duties  not  involving  service  with  troops." 

A  post  exchange  officer  is  selected  and  detailed  by  the  post 
commander,  and  as  such  is  under  the  command  and  performs 
duties  under  the  supervision  of  the  same  authority. 

Held,  that  the  duties  of  a  post  exchange  officer  are  not  dis- 
tinct from  those  of  an  officer  serving  with  troops,  but  are 
habitually  performed  by  an  officer  so  serving,  and  that  this 
officer  might  not  lawfully  be  assigned  to  the  duty  in  question. 
88-600,  J.  A.  G.,  Apr.  8,  1913. 


INDEX 


Par. 
A 

Accounts     102 

Accounts,  Auditing  of 55,  287 

Accounts  Payable 71,  87 

Accounts   Receivable   70,80 

Accounts,     System    of    Keeping 

(Also,  see  Ch.  I,  Par.  38)    ...  37 
Amount  of  Indebtedness  of  Sol- 
diers      4,    39 

Annual    Statement    261 

Auditing  Accounts    55,  267 

B 

Balance  Ledger   244 

Balance  Sheet   106,  265 

Balance,  Trial 103,  258 

Benefit      of      Entire      Garrison 

Fund    41,   96 

Bill  Payable   89 

Bills  Receivable  (Enlisted  Men)  67 
Bills  Receivable  (Notes)    ....68,  89 
Buildings  and  Fixtures  Account  81 
Building  and  Fixtures  Deprecia- 
tion     274 

Building   and   Fixtures   Expense 
Account    73,    101 


Par. 

Credit  by  Post  Exchanges  to  En- 
listed Men  309 

Credit  by  Post  Exchanges  to 
Officers  308 

Custodian,  Responsibility  of  ...  .288 


Daily  Sales  Report  50 

Department     Stock     Accounting 

255-257 

Deposits,  Soldiers',  Liability  for 

Indebtedness   to   P.   E 286 

Depreciation    in    Buildings    and 

Fixtures    274 

Digest  of  Opinions,  J.  A.  J.  (Also 
See    Table    of    Contents,    Ch. 

VI)     283-331 

Discount  Account    98 

Disposition  of  .Business   42 

Disposition  of  Funds   12 

Distribution  of  Dividends   ..41,  269 

Distribution  of  Profits    41,  269 

Dividend  Account   38,  90, 

Double  Entries,  Systematic  Post- 
ing of    231 

Double  Entry  Bookkeeping   (Ch. 
II)     56-107 


Capital  Stock    79 

Capital,  Working   38,  275 

Cash    Account    80 

Cash  Book  61 

Cash  Book,  Posting  from   236 

Cash-Journal   241 

Cash  Register  53 

Changing  from  Single  to  Double 

Entry    249 

Chaplain's   Fund    24 

Check  Account  71 

Civilian  Attendants,  Post  Ex- 
change, Medical  Supplies  for  22 

Collection  of  Notes  53 

Columnar   Ledgers    245 

Company    Exchanges    281-282 

Coupon  Account    85 

Coupon  Books 51 

Coupon  Issue  Book    64 

Court-martial,  Sentence  of  For- 
feiture of  Pay  to  Satisfy  In- 
debtedness to  Post  Exchange  285 


Exchange  Council    29 

Exchange  Officers    27 

Exchange  Steward    28 

Expense  Account    72,  99,   100 


Final   Disposition   of   Business..  42 
Final     Statements     of     Soldiers, 

Paying  of 327 

Financial  Statement   261 

First  Expense 32 

Fraud     by     Exchange     Steward, 

Military  Offense 328 

Fuel  and  Light   329 

fuel    for   Post  Exchange   Build- 
ing       19 

G 

General  Ledger    243 

General  Remarks  on  Accounts.  .102 
Government  Agencies  and  Instru- 
mentalities   in    General    (Also 


Par. 
see     Table     of     Contents,     Ch. 

VI)     283-331 

Gross  Profit   66,  104 


Information    of    Exchanges    280 

Inspection  of   Exchanges    23 

Insurance   Accounts    97 

Internal    Revenue   Tax    297 

Inventory   Account    82 

Inventory  Book    37 

Invoice    File    46 

Invoices   Received  Book   239 

Invoices  Sent  Book ".240 


Journal    60,   238 

Journal  Record  Entries    233 

Journal,  Posting  from   237 


Laundry  and  Tailor  Charges    . .    13 
Laws   of  Congress   on   Post   Ex- 
changes         1-3 

Leasing  Portions  of  Government 

Reservations    330 

Ledgers    243-248 

Liability  for  Debts  to  Post  Ex- 
changes     310-312 

Library   Books,    Purchase    of    . .  41 

Library  Books,  Repairs  of 15 

Light    and    Fuel    329 

litigation  for  Post  Exchanges  ..301 

Loose   Leaf   Ledgers    17 

Loss  of  Exchange  Fund 10 

M 
Management,      Suggestions      o  n 

.44-54,   275-277 

Medical  Supplies  for  Civilian  At- 
tendants of  Post  Exchanges  . .   22 

Merchandise  Account    37-66 

Merchandise  Destroyed    254 

Merchandise  on  Hand   82 

Model  Set,  Double  Entry  Book- 
keeping     108-192 


Operating  Expense  Account  ....  101 
Post  Exchanges: 

Appraisement  of  on  Change  of 

Membership     33 

Appropriations   for,   How   Ex- 
pended      314 


Par. 

Buildings  26 

Buildings,  Construction  of  ..574 
Competition  with  Commercial 

Houses  306 

Council  29 

Council,  Liability  of,  for  Debts 

of  Exchange  311 

Disposition  of  42 

Feature  of  34 

Fund,  Post  Exchange 10,  12 

Independent  and  Branch,  at 

Same  Post  321 

Inspections  of 23 

Limitations  as  to  Business  305-307 

Membership  33 

Not  a  Corporation,  but  a 

Cooperative  Store  299 

Officer,  Exchange  27 

Officer,  Exchange,  Allowance 

for  Services  300 

Officer,  Exchange,  Liability 

for  Debts  of 310,  311 

Purpose  25 

Recognition  of  by  Congress  . .  1-3 

Steward,  Exchange  28 

Steward,  Exchange,  Fraud  by  328 

Transfer  of  Funds  6*,  279 

Creation  of  .  .  .283 


Posts  not  in  a  Department   290 

Post  Gardens,  Maintenance  of  . .  41 

Post  Gardens,  Seeds  for 41 

Posting  Double   Entries    230 

Posting  from  Cash  Book 236 

Posting  from  Journal    237 

Posting  from  Purchase  Book  ...234 

Posting  from  Sales  Book   235 

Practical  Set,  Double  Entry  Ac- 
counting   193,  229 

Price  List,   Lunchroom    ........  36 

Proceedings  of  Exchange  Council 

8,  192,  266 

Profit  and  Loss  Account 75,  105 

Purchase    Account    83 

Purchase  Book 62,  107 

Purchase  Book,  Posting  from... 233 
Purchase  and  Sale  of  Goods  275-276 


Quartermaster  Material  for  Post 
Exchanges   2,  17 


Par. 
R 

Recreation  and  Amusement  Fund  41 
Regulations  for  Post  Exchanges 
(Also   see   Table   of   Contents, 

Ch.   I)    1-43 

Reorganization  of  Post  Exchanges  43 

Reserve    Fund 91 

Responsibility    for    Expenditures     9 

Restaurant    33,  49 

Retired     Officers     as     Exchange 

Officers 330 

Revenue   Account    99 

Rules  of  Orders  .  .  31 


Sale  of  Goods    276 

Sale  of  Intoxicating  Liquors   . .  3,  5 

Sales    Account    84 

Sales  Book    63,  107 

SaJes  Book,  Posting  from   235 

Sales     Department     Stock     Ac- 
counting     255-258 

Soles  on  Credit    39 

Scheme  for  Keeping  Account  of 

Stock    44 

Scheme  for  Simplifying  Accounts 
When    Exchange    is    on    Cash 

Basis 47 

Shortage  of  Funds,  Responsibility 

for   10,  311 

Shortage  in   Merchandise    254 

Special  Problems  (Also  see  Table 

of  Contents,  Ch.  V)   230-282 

Special  Ledger   248 

Stoppages  of  Pay  for  Post  Ex- 
changes          18 


Par. 
Stoppages  of  Pay  to  Reimburse 

Post   Exchanges    28 1 

Stock  Accounting    44,  250-257 

Storeroom 'Stock  Accounting  251-254 
Sub-committee     of     Noncommis- 
sioned   Officers    30 

Sub-committee  of  Council 29 

Subsistence  Stores,  Purchase  of    21 
Surplus  Fund  Account   .  .   93 


Tabular  Ledger   246 

Tailor  and  Laundry  Charges    . .    13 
Taxation      of     Government 

Agencies     290 

Telegrams      over      Government 

Lines    326 

Trading  Account   104 

Transfer    of    Government    Prop- 
erty  325 

Trial  Balance   103 

Trial      Balance,      Detection      of 
Error  in    .  .  .256-260 


U 
Uniform  Clothing  for  Sale  20 


Volunteer   Bands 320 

W 

Withdrawal  of  Members   32 

Working  Balance  Sheet   lOfi 


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